Brocade Communications Systems Inc

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BRCD : NASDAQ : Technology
$12.57 | %
Today's Range: 12.53 - 12.57
Avg. Daily Volume: 4392900.0
04/28/17 - 4:00 PM ET

Financial Analysis


BROCADE COMMUNICATIONS SYS's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. BROCADE COMMUNICATIONS SYS is extremely liquid. Currently, the Quick Ratio is 2.37 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.89% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)581.46574.28
EBITDA ($mil)65.73143.21
EBIT ($mil)23.87120.4
Net Income ($mil)-5.6893.65


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1230.251392.01
Total Assets ($mil)4880.823908.9
Total Debt ($mil)1563.95798.32
Equity ($mil)2573.532501.19


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin69.2571.47
EBITDA Margin11.324.93
Operating Margin4.120.97
Sales Turnover0.480.58
Return on Assets2.348.87
Return on Equity4.4413.86
Debt Q1 FY17 Q1 FY16
Current Ratio2.63.43
Debt/Capital0.380.24
Interest Expense15.499.87
Interest Coverage1.5412.2


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)407.51402.56
Div / share0.060.05
EPS-0.010.23
Book value / share6.326.21
Institutional Own % n/a n/a
Avg Daily Volume4350542.09167812.0

Valuation


HOLD. This stock's P/E ratio indicates a premium compared to an average of 35.19 for the Communications Equipment industry and a significant premium compared to the S&P 500 average of 25.27. For additional comparison, its price-to-book ratio of 1.99 indicates a discount versus the S&P 500 average of 3.03 and a discount versus the industry average of 3.43. The price-to-sales ratio is similar to the S&P 500 average, but it is significantly below the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BRCD 44.82 Peers 35.19   BRCD 17.08 Peers 17.46

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

BRCD is trading at a significant premium to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BRCD is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BRCD 13.35 Peers 19.59   BRCD 0.64 Peers 1.03

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

BRCD is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

BRCD trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BRCD 1.99 Peers 3.43   BRCD -65.86 Peers -0.22

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BRCD is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, BRCD is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BRCD 2.17 Peers 3.24   BRCD 4.03 Peers 20.19

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BRCD is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BRCD significantly trails its peers on the basis of sales growth

 

 

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