Morgan Stanley Raises PT on Fusion-io on CEO Transition
UPDATE: Morgan Stanley Raises PT on Fusion-io on CEO Transition
11:01a ET May 15, 2013
In a report published on Wednesday, Morgan Stanley analyst Katy L. Huberty maintained an Overweight rating on Fusion-io (NYSE: FIO) and adds a price target of $29.00 on the basis of promising revenue growth with management transition.
In the report, Morgan Stanley noted, "Management transition reflects vision of doubling (or tripling) revenue with focused investments in high-ROIC projects, while reducing investment in non-core areas. Focus areas include: 1) launching next-gen ioScale and ioDrive in C2H13, 2) moving SDK to general availability, 3) expanding revenues through international expansion, new large customers, and market segments (like mid-market with NexGen). Profitable growth a top priority after nearly doubling the sales force and growing OpEx faster than revenue in FY13. By slowing investments in low or no profitability projects (e.g. ioDrive Octal or ioSAN), leveraging recent sales hires to win new large customers, and integrating recent acquisitions, management expects to grow OpEx slower than revenue in FY14 (reflecting potential EPS upside vs. our forecast)."