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Aruba Networks Is a Good Destination Pre-Earnings

NEW YORK (TheStreet) -- With better-than-expected results coming from Cisco (CSCO - Get Report) and Rackspace (RAX - Get Report), the Street seems more optimistic about mobile enterprise company Aruba Networks (ARUN) which will report third-quarter earnings Thursday.

There were doubts that the company could ever recover after a disappointing 2013 that saw its stock drop 14% due to threats from Cisco. But Aruba shares are up 11% in 2014. And not only has the company rebounded nicely, analysts are now convinced that the future is even brighter.

One in particular is Ashok Kumar, analyst at Imperial Capital. Kumar just initiated coverage on the stock with an Outperform rating and a price target of $23, which suggests 15% upside from current value of $19.90 (at 3:30 p.m.). In his research note, while pointing out that Aruba is second only to Cisco in double-digit market share in security, Kumar praised Aruba's innovative capabilities for enterprise networks.

I agree. For that matter, I don't believe Aruba's prospect is any rosier now than it were last year. As I've said recently, too much was being made of one quarter that sent investors into a frenzy. As any growth company, Aruba experienced some growing pains. But it certainly didn't warrant the punishment the company took. On Thursday, all of that should be a distant memory.

The Street will be looking for 20 cents in earnings per share on revenue of $180.8 million, which would represent a year-over-year revenue increase of 23%. Earnings, meanwhile, are projected to grow by 82%. For the full-year, analysts are calling for earnings of 76 cents per share, up, 21%. Full-year revenue calls for $706.4 million, up 18%.

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