FBN Securities trimmed its price target on Quantum Corp. (NYSE:QTM),
while retaining its "Outperform" rating on the data storage provider,
following third-quarter report.
"Although the report was rather mixed, we still like QTM’s shares as
we think that it offers good technology which would be of interest to
potential acquirers...and the company is providing reasonable guidance
that we believe it could beat," wrote Shebly Seyrafi, an analyst at FBN.
For the third quarter, QTM reported revenue of $173.5 million,
greater than consensus of $171.1 million and EPS of 5 cents in-line with
consensus. Gross margin of 43.6 percent fell from 45.0 percent in the
second quarter due to the decline in service gross margin.
QTM guided fourth-quarter revenue of $160 million - $170 million, lower than consensus of $169.7 million.
Seyrafi said his new price target of $3.15 from $3.35 is based on a
$1.70 fundamental value and a $3.75 take-out value, with the odds of QTM
being acquired at over 50 percent over the next few years.
On Thursday, shares of QTM tumbled 12.4 percent to trade at $2.46.
The stock has been trading between $1.53 and $3.93 over the past year.
