NEW YORK (TheStreet) -- Brocade Communications Systems (BRCD) stock is increasing 11.85% to $9.53 on heavy volume in afternoon trading on Thursday following the release of its first quarter earnings and a ratings upgrade at Wunderlich.
After yesterday's market close, the storage networking vendor reported 2016 first quarter adjusted earnings of 29 cents per share on revenue of $574.3 million, above analysts' estimates for earnings of 24 cents per share on revenue of $561.2 million.
Brocade now expects that second quarter earnings will range between 22 cents per share and 24 cents per share on revenue between $542 million and $562 million. Analysts expect earnings of 23 cents per share on $552 million in revenue, Barron's reports.
Following the company's financial results, Wunderlich upgrades shares to "buy" from "hold" and increased its price target to $10.50 from $9.50.
Brocade ""is on track for a more significant product cycle than we expected, including shipments of products for analytics in addition to network elements," the firm wrote in a note, according to Barron's. The company is "in the early stages of potentially rich product line expansion."
About 12.95 million shares of Brocade have been traded so far today, well above the company's average trading volume of roughly 4.33 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B-.
Brocade Communications' strengths such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and growth in earnings per share outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: BRCD
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 article's author.