Within the networking space, competition is always a huge consideration and I didn't feel Aruba addressed it well enough. I anticipate there will be pricing pressure from the likes of Cisco ( CSCO), Hewlett-Packard ( HPQ) and Juniper ( JNPR). In particular, Cisco and HP has better margin leverage. Can Aruba overcome any sort of attack from either or both companies and be able to maintain its level of profitability? Also, while I'm not ready to proclaim that Aruba has any sort of technological advantage over its rivals, I think the company must figure out a way to leverage what it does well and in order to do it more effectively.

Bottom Line

With the stock trading at $20 per share, I think there is considerable amount of value to be had. Despite the competitive pressures, the company's fundamentals are solid and seem poised to continue its growth momentum. I wonder though, how long it will remain as an independent. With such solid growth, it is not out of the realm of possibility that Aruba may one day find itself the target of an acquisition.

While I understand the response, I think investors that panicked indeed overreacted. Though the stock is not yet cheap by many standards, I think value investors with some appetite for risk, should consider this as an opportunity as part of a long-term hold.

At the time of publication, the author held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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