NEW YORK (TheStreet) -- Shares of Brocade Communications (BRCD) were falling 13.57% to $9.04 in mid-morning trading on Friday following the San Jose, CA-based company's weak fourth-quarter earnings forecast.
After yesterday's market close, Brocade reported 2016 third quarter earnings and revenue that were above analysts' projections, but provided a light fourth-quarter earnings outlook.
JPMorgan consequently cut its price target to $8.50 from $10 on the stock.
The firm said the company had a "disappointing quarter" and that the "lone bright spot" in its earnings was Ruckus' higher-than-expected revenues of $73 million, TheFly reports. Brocade acquired the Sunnyvale, CA-based wireless company Ruckus for approximately $1.5 billion earlier this year.
Additionally, Deutsche Bank maintained its "hold" rating on Brocade stock, saying it expects weak sales trends in its core business due to project delays, as well as weak OEM storage demand, among other factors.
The firm raised its price target to $9 from $8, citing its better-than-expected third quarter results. However, Deutsche Bank said the beat was largely due to Ruckus outperformance.
Outside of Ruckus, the firm noted that Brocade's sales remained weak in its storage networking and IP networking segments.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate BROCADE COMMUNICATIONS SYS as a Buy with a ratings score of B-. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: