Shares of enterprise server and storage technology vendor Fusion-IO (FIO) are up $1.86, or almost 7%, at $31.56 after Morgan Stanley’s Katy Huberty reinstated coverage of the stock with an Overweight rating, writing that its overall market for “enterprise flash [storage equipment]” could rise from $2 billion at present to $20 billion “over time.”
Huberty estimates the company may make $332.7 million in revenue in the fiscal year ending this June, and 25 cents EPS. That is higher than the Street consensus of $331.6 million and 24 cents.
Fusion’s key advantage is software, she writes, and competitors’ wares lack “full integration with data center ecosystems.”
Huberty likes the acquisition of ioTurbine, which Fusion bought last summer, as its software for caching data in virtual machines will get the company into “large opportunities in virtualized environments.”
“Over half of FIO�s customers are using its products for persistent storage in scale-out environments,” observes Huberty, “which demonstrates the trust and deep customer relationships FIO built over the last several years.”
FIO has been notching large gains of late on positive reviews. Yesterday, Credit Suisse’s Kulbinder Garcha also reinstated coverage, with an Outperform rating, sending the shares up 10%.
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