(RTTNews) - Tuesday, FBR Capital Markets initiated coverage of SolarWinds, Inc. (SWI: News ) stock with an Outperform rating and a price target of $24.

Analyst Daniel Ives said that a key ingredient in SolarWinds' recipe for success has been the company's low-touch sales approach and compelling pricing model, which are set so that an individual network engineer can purchase the company's solutions with minimal or no management approvals.

The analyst noted that in addition to approaching networking customers with its unique low-touch go-to-market strategy, SolarWinds has built an extremely profitable maintenance revenue stream that has served as a key differentiator for the company's business model and has been a major contributor to the company's above industry average profitability (50%+ operating margins), an impressive feat in his opinion.
Given the analyst's belief that SolarWinds' installed base remains extremely underpenetrated, coupled with a number of promising growth initiatives on both the international and enterprise front, he believes the company should be able to post 20%+ top-line growth with 50%+ operating margins for the next few years, a unique fundamental combination that makes him positive on shares at current levels.

Currently, SWI is down $0.49 or 2.54% and trading at $18.81.

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by RTT Staff Writer

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