Fusion-io (FIO) Acquisition Multiple Likely Would be Higher than sTec (STEC)

June 24, 2013 11:09 AM EDT
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Price: $11.24 --0%

Rating Summary:
    7 Buy, 19 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Mizuho Securities maintained a Buy rating on Fusion-io (NYSE: FIO) with a price target of $22.00. Analyst Abhey Lamba thinks today's announcement of a deal between Western Digital Corporation (NASDAQ: WDC) and sTec, Inc. (NASDAQ: STEC) highlights the importance of flash drives in hardware.

Today's deal implies an $11 multiple for Fusion-io, but given its leadership position, it should fetch a much higher premium. If Fusion-io gets half the acquisition multiple of other enterprise class storage vendors, its price would likely be in the $20s, thinks Mizuho.

For an analyst ratings summary and ratings history on Fusion-io (NYSE: FIO) click here. For more ratings news on Fusion-io click here.

Shares of Fusion-io closed at $13.01 yesterday.

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