) to near term buy from neutral.
Analyst John Roy says second quarter results easily beat his $0.07 loss estimate on $64.4 million in revenues. He says high end demand in storage area network space is alive and well, and that the company is able to feed it with new two-gigabyte products. Roy notes the robust market for the company's Director product far exceeded management's expectations, and it appears that storage rival Brocade Communications is not competing in this particular market.
Roy narrowed his $0.17 2002 loss estimate to a $0.08 loss, and raised his $0.06 2003 earnings per share estimate to $0.14 EPS. He also thinks the stock has a solid 21% upside potential based on three-year price-earnings to growth analysis, and about a $10 implied price. For the long term, he rates the stock as buy.