ISI Group Maintains Neutral on Brocade Communications
ISI Group Inc. reiterates its Neutral rating on Brocade Communications as the company's Ethernet momentum is impressive but BDX revenue contribution is underwhelming.
ISI comments, “BRCD showed double-digit y/y revenue growth in its Ethernet business for the 2nd quarter in a row and added a record number of new customers. Perhaps most encouraging, we saw tangible signs of synergy between BRCD's SAN and Ethernet business. … While fabric adoption bodes well for BRCD's long-term viability and the pull-through of adjacent products such as the MLXe router, we are somewhat underwhelmed by the FY11 revenue contribution of $15 million from BRCD's VDX switch which is a central part of BRCD's Ethernet fabric solution.”
BRCD closed at $4.48 per share on Monday.
