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Technology Stocks : Brocade Communications Systems,Inc. (Nasdaq-BRCD) -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (712)	2/21/2001 7:23:31 PM
From: John Carragher	Read Replies (2) \| Respond to of 1583

cnbc says sell off in futures market was all do to brcd saying second quarter flat.

To: Ibexx who wrote (712)	2/21/2001 7:39:36 PM
From: MGV	Respond to of 1583

Quick back of the envelope calculating - The guidance leads to FY01 (ending October) revenue of about $775 million with $0.60 per share. At $40 BRCD has a P/S of about 11.5 and a P/E of about 67. With Q3 and Q4 growth guided to 100% annualized, I'd expect the "optimistically realistic" analysts to come out tomorrow with 6-9 month targets of around $60 based on a P/E to G of 1.00 on the forecast growth rate of 100%. The less bullish analysts could provide a target in the $45 range based on: 1. lack of visibility throwing Q3 and Q4 guidance into question; 2. inability of management to forecast after guiding to 150% growth last Q and now forecasting 1 year blended growth of 86%; 3. tech sector multiple contraction such that no tech stock deserves a 1.0 P/E to G at the moment. I don't think this stays long in the mid 30s. I also don't think it sees as high as the high 40s without a better view of exactly how Q2 shakes out. Factors that would change the view to the upside would be further rate cuts followed by signs that the cuts are helping the manufacturing sector and new products in the director class of switches. Reyes and Byrd did say that sales to SUNW would provide upside to their guidance and they expect that to happen by Q3. They also said that they expect to ramp several large projects beginning inQ3 that offer upside to their present guidance. Finally, they added the obligatory statement that they believe the present guidance is "thoughtful and conservative." [Follow up calculations - if BRCD hits guidance provided today with no upside, it will do about 240 million in its Q4 - roughly an 80% increase year over year. FY01 revenue would be around 775 million, a 135% increase over FY00s 329 million. Assuming 80% bottomline growth in FY02, Forward earnings would be $1.08. An 80 P/E would provide a 12 month target from next January to January 2003 of $86. This explains why Reyes and others have been selling aboe $100!].