Foundry Networks, Inc. FDRY Message Board

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Technology Stocks : Foundry Networks, Inc. FDRY

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From: mopgcw	4/9/2006 2:12:22 AM
	of 1225

Foundry Networks - FDRY-NNM Sell - Price 17.17 on April 4 by American Technology Research We see more downside than upside at current levels [and] are downgrading FDRY from Hold to Sell because: (1) We find the stock overbought trading at 27 times consensus calendar-year 2007 (20 times, excluding $5.10 net cash). Peer Juniper Networks (JNPR) trades at 19 times calendar-year '07 EPS (15.5 times, excluding $3.37 net cash) and Cisco Systems (CSCO) at 17 times CY07 (15 times, excluding $2.40 in net cash); (2) we believe FDRY's advantage in 10-gigabit will narrow as competitors step up their efforts. A key risk: high probability JNPR enters the high-end 10-gigabit Layer 3 switch space...; and (3) while FDRY will likely report a strong March quarter, we're concerned that the U.S. government (20% to 25%) vertical faces uncertainty.

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