Equity research analysts have provided views on where they believe the stock will be trading in the future. According to Thomson Reuters, analysts are projecting a consensus target price of $12.40 on company shares. Sell-side analysts tap into their vast knowledge of the company to help gauge future stock movement. Because of the various techniques used, analysts may come up with very different stock target estimates.
Analysts and investors may use different metrics in order to calculate a price target projection. A very common metric used is the price to earnins ratio of a company. This calculation comes from dividing the current share price by the projected earnings per share. At the time of writing, Brocade Communications Systems, has a P/E Ratio of 24.20. Investors may also examine a company’s PEG or price to earnings growth ratio. The PEG ratio represents the ratio of the price to earnings to the anticipated future growth rate of the company. A company with a PEG Ratio below one may be seen as undervalued while a PEG Ratio above one may signal that the company is overvalued. A PEG Ratio close to one may be considered to be fair value. Currently, the stock has a PEG Ratio of 2.40.
Let’s take a quick look at stock performance. Shares are currently trading $1.59 away from the 50-day moving average of $10.75 and $2.80 away from the 200-day moving average of $9.54. Shares are currently trading -1.28% away from the 52-week high price of 12.50 and +66.76% off the 52-week low of 7.40. Keeping an eye on the stock price relative to moving averages and yearly highs/lows may help evaluate future stock value.