2 Stocks With Downgrades: ARUN, WOOF

NEW YORK (TheStreet) -- The following stocks were downgraded by TheStreet Ratings on Tuesday: Aruba Networks(ARUN) and VCA Antech(WOOF) .

Aruba Networks

The telecommunications equipment company reported last week a second-quarter loss of $11.4 million, or 11 cents a share, wider than a year-earlier loss of $2.8 million, or 3 cents.

"ARUN's balance sheet remains solid: $276M in cash, no debt, net cash of $2.30/share, DSO of 49 days (down 2 days Q/Q), and inventory turnover of 5x (flat Q/Q)," FBN Securities analysts wrote in a Feb. 17 report. "Deferred revenue of $91M was flat Q/Q, resulting in bookings of $126M (down 12% Q/Q). However, deferred revenue spiked by 33% Q/Q the prior quarter due to inventory fill at new distributor Synnex, so flat growth off of this is fine."

Shares of Aruba Networks were downgraded to hold from buy at TheStreet Ratings.

"The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations," TheStreet Ratings wrote. "However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation."

Aruba Networks has a forward P/E of 27.38; the average for telecommunications equipment companies is 28.38. For comparison, Riverbed Technology(RVBD) and Polycom(PLCM) have lower forward P/Es of 21.79 and 14.01, respectively.

Eleven of the 21 analysts who cover Aruba Networks rated it buy. Nine analysts gave it a hold rating and one rated it sell.