Tech stocks have had a good run and when investors find tech stocks with what looks like a low valuation, they should be cautious. Blue Coat Systems (Nasdaq:BCSI) is a good example of why that is. While this security and WAN optimization company does indeed have multiples well below most tech companies (and the market in general), there is a good reason for that - Blue Coat is one of the least successful players in its markets today and the company is launching yet another organizational restructuring in the hopes of finding a new path to sustainable growth and better market share.
Fourth Quarter as Bad as Expected
Blue Coat warned in early May that this fiscal fourth quarter would be bad, and the stock has been sliding ever since, losing about a fifth of its value. When Blue Coat actually announced those results on Thursday, performance was indeed ugly.
Revenue dropped 9% from the year-ago level and 2% sequentially, led by declines in product revenue of 5% and 21% respectively. Some products did show some growth (PacketShaper was up 7% sequentially, and MACH5 revenue rose 15%), but together those products were only about 30% of sales.
To read the full piece, please click below:
http://stocks.investopedia.com/stock-analysis/2011/Blue-Coat-Looks-Threadbare-BCSI-RVBD-CSCO-INTC-FTNT-WBSN-CTXS0531.aspx
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