Riverbed climbs after analyst upgrades stock

posted: 32 DAYS 6 HOURS AGO

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SAN FRANCISCO -Riverbed Technology Inc. rose Monday after a Piper Jaffray analyst upgraded the stock, saying a drop in the stock price following the corporate data network manager's recent earnings report makes for a good time to buy the shares.

Riverbed shares rose 83 cents, or 3.9 percent, to $21.99 in afternoon trading. They fell 10.3 percent on Friday to close at $21.16 following the company's third-quarter report late Thursday.

On Thursday, Riverbed reported that it earned 8 cents per share in the third quarter, compared with a loss of 17 cents per share in the year-ago quarter. When excluding items, Riverbed earned 19 cents per share. The company's revenue rose 18 percent to $102 million.

Analysts polled by Thomson Reuters had expected an adjusted profit of 15 cents per share on revenue of $97 million.

In a Monday client note, Piper Jaffray analyst Troy D. Jensen raised his rating for Riverbed to "Outperform" from "Neutral." He holds a $24 price target for the shares.

Jensen said that the company's report should have been considered "very solid" and that the drop in share price was uncalled for.

He said worries that the company was seeing weakness in its enterprise business were probably excessive. He believes the company concentrated on near-term opportunities in its government business during the third quarter, but that its enterprise business is still strong and will "likely bounce back materially" in the current quarter.

"We also believe the Government vertical will remain strong in Q4 given large deals in this space typically roll out over multiple quarters," he said.

2009-10-26 15:50:56