Brocade (NASDAQ:BRCD) Faces Challenges in Ethernet Segment

While maintaining a "Buy" rating on Brocade (NASDAQ:BRCD), Needham & Company says they're concerned about the short-term effects of the Ethernet segment of the company, as the SAN business remains solid.

Needham said, "Execution in core SAN business continues solid but challenges in Ethernet continue/remain. In Ethernet, BRCD is focusing more on enduser demand generation, channel development, sales related hiring and launching its recently announced next generation Ethernet fabric technologies - all which could take some time to be effective."

Brocade was crushed Tuesday, closing down to $5.13, losing $0.57, or 10 percent. Needham has a price target of $6.50 on them.