Blue Coat Systems (Nasdaq: BCSI) is making turncoats out of analysts today.

The fourth quarter was a run-of-the-mill performance with $0.30 of non-GAAP earnings on $121 million of sales, just about even with analyst targets. But the first-quarter outlook was a bluecoat defeat on par with the Battle of Fredericksburg as both revenue and earnings targets sat far below current expectations. The high end of management's guidance ranges failed to top the lowest available analyst target.

In response, at least five analyst firms either downgraded Blue Coat today or at least reduced their target prices drastically.

The bulls, including Needham and FBR Capital, still believe in a long-term turnaround and prefer to call the soft guidance "sober." Needham sees a huge takeover target painted on Blue Coat's back based on its strategic position and low valuation.

But bears such as Wedbush Securities saw evidence that the turnaround is taking longer than expected because of a lack of management action amid heavy competition.

All three of these firms rank among our CAPS All-Stars. There are smart people on both sides of the bull/bear argument here.

CEO Michael Borman doesn't exactly inspire confidence when he talks about merely maintaining his current market share. I'd expect loftier goals given how badly chief competitor Cisco Systems (Nasdaq: CSCO) is doing these days. Then again, I suppose that means brisk business for WebSense (Nasdaq: WBSN) and Riverbed Technology (Nasdaq: RVBD) instead.

Borman expects to do better in the second half of fiscal 2012, meaning the first half of that calendar year. In the meantime, Blue Coat shares have shed about 30% of their value in 2011 -- and 11% this week alone.

Is this a grade-A, prime buy-in opportunity or just another in a continuing string of disappointments? My thumbs-up rating of the stock in CAPS isn't helping my own All-Star status any. I'm giving freshly-appointed CEO Borman the benefit of the doubt, so I'm siding with the bullish analysts here.

If you can't quite make up your mind yet, you should add Blue Coat to your watchlist for now. It's an excellent way to keep an eye on interesting stocks while you learn more about them, ready to pounce on significant news. Just click here to get started!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.