What Analysts Are Saying After Brocade’s Earnings

By Chris Lange Updated Jan 13, 7:44AM EST · Published May 22, 9:55AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

What Analysts Are Saying After Brocade’s Earnings — © Thinkstock

Brocade Communications Systems Inc. (NASDAQ: BRCD) reported its fiscal second-quarter after the markets closed on Thursday. 24/7 Wall St. has included some highlights from the earnings report, as well as what analysts are saying about Brocade after the fact.

The company posted $0.22 in earnings per share (EPS) on $523 million in revenue. Consensus estimates called for $0.22 in EPS on revenue of $541.1 million. Previously the company released preliminary results that predicted revenue in the range of $518 million to $528 million, compared to the previously guided range of $542 million to $562 million. EPS are expected to be in the range of $0.21 to $0.23, down slightly from the previous range of $0.22 to 0.24.

Management thinks that despite the challenging environment for both SAN and IP networking, Brocade had a productive second quarter. Additionally the company began shipping its industry-leading Gen 6 Fibre Channel switching solution, and garnered its first customer win for the New IP-based mobility platform, Brocade Virtual Core for Mobile, that it launched earlier in the quarter.

Merrill Lynch gave its investment rationale as follows:

Brocade trades at a significant discount to peers despite: 1) a more durable SAN business that expectations, 2) a number of product cycles over the next several quarters impacting business lines that account for over 87% of product revenues and 3) long-term opportunities in the growing SDN and NFV trends.

[recirclink id=333611]
A few other analysts also weighed in:

Barclays lowered its price target to $9 from $10.
Goldman Sachs has a Neutral rating and lowered its price target to $9 from $10.
Piper Jaffray lowered its price target to $8 from $9.
RBC lowered its price target to $9 from $10.
BMO has a Market Perform rating and a price target of $8.

Shares of Brocade closed trading at $7.97 on Friday. The stock has a consensus analyst price target of $9.80 and a 52-week trading range of $7.40 to $12.88.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.