Brocade Communications Systems (BRCD) vs. Acme Packet (APKT) Critical Analysis

Brocade Communications Systems (NASDAQ: BRCD) and Acme Packet (NASDAQ:APKT) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Brocade Communications Systems and Acme Packet, as provided by

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brocade Communications Systems 1 3 0 0 1.75
Acme Packet 0 0 0 0 N/A

Brocade Communications Systems currently has a consensus price target of $12.83, indicating a potential upside of 0.81%.

Insider & Institutional Ownership

83.7% of Brocade Communications Systems shares are held by institutional investors. 1.8% of Brocade Communications Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.


Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.7%. Acme Packet does not pay a dividend. Brocade Communications Systems pays out 314.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.


This table compares Brocade Communications Systems and Acme Packet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brocade Communications Systems -3.56% -3.07% -1.62%
Acme Packet N/A N/A N/A

Earnings & Valuation

This table compares Brocade Communications Systems and Acme Packet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brocade Communications Systems $2.35 billion 2.25 $213.81 million $0.07 181.86
Acme Packet N/A N/A N/A ($0.08) N/A

Brocade Communications Systems has higher revenue and earnings than Acme Packet. Acme Packet is trading at a lower price-to-earnings ratio than Brocade Communications Systems, indicating that it is currently the more affordable of the two stocks.


Brocade Communications Systems beats Acme Packet on 5 of the 9 factors compared between the two stocks.

About Brocade Communications Systems

Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.

About Acme Packet

Acme Packet, Inc. provides session delivery network solutions, which enable the delivery of collaboration services, applications, and next-generation voice, video, data and unified communication and collaboration services and applications across Internet Protocol (IP), networks. The Company’s session delivery network solutions are used by over 1,925 Acme Packet customers in 109 countries. The Company’s customers include fixed line, cable, mobile, transit and over-the-top (OTT), communication service providers, as well as enterprises, contacts centers and government organizations. The Company sells its products and support services through over 330 distribution partners and through its direct sales force. In April 2012, the Company acquired IPTEGO GmbH.

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