Market Assigns Zero Value To BRCD's LAN Business

Analysts at ThinkEquity Partners reiterate their "buy" rating on Brocade Communications Systems Inc (NASDAQ: BRCD). The target price for BRCD is set to 5.57.

“Given that close to half of the quarter remains, we believe it is not feasible to gauge the health of Brocade's business one way or the other. However, with the BRCD stock staying at depressed levels since the announcement of FY1Q10 results, we put the company's valuation into perspective in this note,” the analysts say.

“Considering our belief that the likelihood of the worst-case scenario is about 25% and our base-case scenario is the most-likely scenario with about 50% probability, we believe a zero valuation for the LAN business is not warranted,” the analysts add.

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