JMP Boosts Aerohive Networks Target To $10 Based On New E-Rate Data

In a report issued Monday, JMP Securities analysts Erik Suppiger and John Lucia reiterated a Market Outperform rating on shares of Aerohive Networks Inc (NYSE: HIVE), while boosting their price target from $8 to $10 on new data regarding the E-rate program.

Positive checks and data reported by the Universal Service Administrative Company (USAC) have led the analysts to estimate that the Federal government has already formally approved approximately half of the E-rate requests. According to the USAC’s website, the government “has been sending E-rate commitment letters out weekly since May 21, and the total funding commitment reached $759 million on June 26.” These figures comfortably surpass JMP’s initial expectations.

Moreover, the firm’s checks confirm the information, and suggest that Aerohive should already benefit from E-rate in the June quarter, and see even stronger spending in the second half of the year.

The analysts were always bullish on E-rate’s outlook. However, they noted that a delay in funding approvals remained a substantial risk. With that risk now mitigated, they see considerably room for upside in Aerohive’s stock. Furthermore, with shares trading below their June highs, an attractive entry point seems to be open. Second quarter results will be reported in about a month, and this event could trigger a surge in the stock price.

Shares of Aerohive were slightly down on Monday, but are up more than 42 percent year-to-date.