Deutsche Bank Raises Violin Memory Price Target

Courtesy of Benzinga.

Deutsche Bank raised its price target on Violin Memory Inc (NYSE: VMEM) Monday from $4.50 to $5.50 and maintained a Hold rating.

Analysts led by Sherri Scribner noted that “VMEM reported solid F3Q-15 results, with revenue and EPS ahead of Street expectations. Sales grew 17 percent Q/Q and the company is beginning to build backlog, growing bookings in excess of 2x revenue.

“VMEM expects F4Q-15 revenue growth to be driven by pipeline improvement, new product adoption and refreshed Concerto software."

Scribner commented, “We have modestly raised our sales estimates to reflect improving business fundamentals and introduced FY-17E of $125M in sales and a loss of $0.65 per share ex-options. We have also raised our price target to $5.50 from $4.50, which is based on 5x our FY-16E sales, in line with high-growth storage peers.”

Risks included “significantly higher or lower revenue levels due to product adoption, inability to deliver on cost-cutting and high cash burn rates,” according to the report.

Scribner concluded that while the firm applauded “the improvements, we continue to expect lumpy revenue growth and believe cash burn will remain an issue until revenue rates increase substantially.”

Violin Memory recently traded at $5.16, down 2.6 percent.

Posted-In: Deutsche Bank Sherri ScribnerAnalyst Color Price Target Analyst Ratings