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What Falling Estimates & Price Mean for Ixia (XXIA)

Zacks Equity Research

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Ixia (XXIA), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in XXIA.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from 38 cents a share a month ago to its current level of 22 cents.

Also, for the current quarter, Ixia has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to breakeven from 6 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.1% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Computer Networks sector, you may instead consider some better-ranked stocks including Extreme Networks Inc. (EXTR), Brocade Communications Systems, Inc. (BRCD) and Emulex Corporation (ELX). While Extreme Networks carries Zacks Rank #1 (Strong Buy), Brocade Communications Systems and Emulex carry Zacks Rank #2 (Buy) and may be better selections at this time.

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IXIA (XXIA): Free Stock Analysis Report

EXTREME NETWORKS INC (EXTR): Free Stock Analysis Report

BROCADE COMMUNICATIONS SYSTEMS N (BRCD): Free Stock Analysis Report

EMULEX CORP (ELX): Free Stock Analysis Report


Zacks Investment Research