Quantum Corp. (QTM) shares are getting a boost today from Merriman Capital analyst Alex Kutz, who today launched coverage of the stock with a Buy rating, asserting that fair value for the stock is in the $2.85 to $3.35 a share range, well above Friday’s close at $1.80.
Kutz says the company is emerging as a strategic alternative to the Data Domain division of EMC in the $3 billion-a-year backup market. “Specifically, we see Quantum finding traction with NetApp partners that have historic Data Domain businesses and are now looking for a vendor that doesn’t have a primary [storage area network] platform that competes with NetApp,” like EMC. He says that Quantum’s tape business, which he says has modest growth prospects, “is now being successfully leveraged as a cash flow stream to pay for sales and marketing and development expenses” in the disk and software sectors.
QTM today is up 8 cents, or 4.4%, to $1.88.
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