Less Than Spectacular Numbers From Brocade Communications Systems, Inc. (BRCD) Cause Stock to Fall


While Brocade Communications Systems, Inc. (NASDAQ:BRCD) today announced decent earnings for the 4th quarter of 2015, it was a less than spectactular outlook for the first quarter of 2016 (1QFY16) which ultimately caused the stock to tumble a bit.

The 4QFY15 earnings per share came in 2 cents higher than forcasted at $0.26, and revenue also beat the consensus by coming in at $589 million versus the expected $575.1 million.

However, the 1QFY16 outlook for the company’s EPS came in at just $0.23 – $0.25 which is lower than the consensus estimate of $0.26. Revenue forcasts also missed the mark, coming in at $550-570 million.

The stock decreased 7.73% or $0.78 during the last trading session, hitting $9.31. About 26.81 million shares traded hands or 583.93% up from the average. BRCD has declined 15.85% since April 22, 2015 and is downtrending. It has underperformed by 14.83% the S&P500.

Out of 8 analysts covering Brocade Communications Systems Inc. (NASDAQ:BRCD), 1 rate it “Buy”, 0 “Sell”, while 7 “Hold”. This means 13% are positive. $14 is the highest target while $9 is the lowest. The $11.57 average target is 24.27% above today’s ($9.31) stock price. Brocade Communications Systems Inc. was the topic in 11 analyst reports since August 19, 2015 according to StockzIntelligence Inc. RBC Capital Markets maintained the stock on November 24 with “Sector Perform” rating. Summit Research upgraded it to “Buy” rating and $14 target price in an August 21 report. Barclays Capital initiated the shares of BRCD in a report on October 14 with “Equalweight” rating. Finally, Goldman Sachs upgraded the stock to “Neutral” rating in an August 24 report.

The institutional sentiment decreased to 0.89 in Q2 2015. Its down 0.23, from 1.12 in 2015Q1. The ratio dropped, as 42 funds sold all Brocade Communications Systems, Inc. shares owned while 115 reduced positions. 36 funds bought stakes while 104 increased positions. They now own 362.23 million shares or 0.92% more from 358.91 million shares in 2015Q1.

Hurley Capital Llc holds 7.55% of its portfolio in Brocade Communications Systems, Inc. for 524,015 shares. Freestone Capital Holdings Llc owns 1.49 million shares or 2.81% of their US portfolio. Moreover, Marque Millennium Capital Management Lcc has 1.88% invested in the company for 312,850 shares. The Missouri-based Anderson Hoagland & Co has invested 1.83% in the stock. Killen Group Inc, a Pennsylvania-based fund reported 1.92 million shares.

Since March 6, 2015, the stock had 0 buys, and 4 selling transactions for $1.55 million net activity. England Gale E. sold 10,000 shares worth $124,753. Gerdelman John W sold 80,000 shares worth $991,864. Odonnell Ellen sold 15,627 shares worth $189,849. Krause L William sold 20,000 shares worth $247,470. The insider Dipentima Renato A sold 7,500 shares worth $92,783.

Brocade Communications Systems, Inc