Strong Earnings, Upgrades and Stock Split Juices Riverbed Tech's (RVBD) Stock


After already doubling year-to-date, Riverbed Technology (Nasdaq: RVBD) is up another 20 percent today after blow-out results after the close.

Riverbed reported third quarter EPS of $0.34, 7 cents better than the Wall Street consensus of $0.27. Revenue for the quarter was $147.8 million, which compares to the estimate of $135.28 million.

Riverbed also sent investors into a frenzy with a 2-for-1 stock split announcement, which is effective November 1.

The strong results lead to three upgrades on Wall Street today and a number of price target hikes.

  • FBR Capital = "This Rocket Ship Has Much More Fuel Left in its Tank. With organizations continuing to put much of their focus on optimization... we believe it is only the early innings of the Riverbed growth story." Reiterating Outperform rating, raises price target from $46 to $58.

  • Needham - "it is our understanding that roughly 50% of RVBD revenue is tied to VMW projects, and we believe datacenter refresh and cloud projects are driving strong results." Maintain Buy, price target raised from $38 to $64.

  • Goldman Sachs - "Riverbed stands out as one of the strongest secular growers in the cloud era." Maintained Neutral rating, raising price target from $36 to $49.

  • Canaccord Genuity - "catalysts will effectively pull our 2012 model into 2011. ... Our price target assumes a ~7x C2011 revenue multiple. Using F5's 8x multiple as the high water mark would suggest a :stretch case of $70." Upgrade from Hold to Buy, target raised to $60.

  • Wedbush - "investors looking to take advantage of network computing and increasing traffic over networks should own Riverbed." Upgrade form Neutral to Outperform, target increased from $44 to $60.

  • Jefferies - "Riverbed is distancing itself from competition as the clear market leader in WAN Optimization, and is enjoying good demand. Data center based products contribute ~33% of sales, up from ~25% a year ago." Upgrades from Hold to Buy, raises price target from $46 to $60.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: RVBD

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