OPNET Remains a Good Value

With encouraging results in 3Q2009 and fiscal 2009 year to-date, we believe that changes in OPNET Technologies Inc.'s (OPNT - Analyst Report) sales process are paying off, and the company will be able to post growth going forward. Moreover, new license revenue growth has accelerated to its highest levels ever.

Growth in high margin license revenue will also help demonstrate operating leverage over the coming quarters. With the recent release of the advanced version Panorama 6.0, the company is expected to capture a greater market share in the Application Performance Management segment.

We therefore maintain our Buy recommendation with our target price of $12.50. With a P/S multiple of 1.4x FY 2009 estimates and 1.3x FY 2010 estimates, OPNET has the one of the lowest valuations of its peer group.

Nayan Mukherjee contributed to this report.