STEC (STEC) Is a Broken Stock After Inventory Disclosure
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STEC, Inc. (Nasdaq: STEC) has failed to gain any traction after falling over 35% today after disclosing inventory push outs at major customer EMC. A few analysts have tried to defend the stock, saying the sell-off is an overreaction - but the stock has continued to trade near the lows of the session.
Despite the defense at a number of other firms, comments from analysts at Webush Morgan could be pulling investors' reaction. Wedbush was one of the first to discuss potential problems at STEC due to the competitive landscape. Wedbush said despite their initial concerns the EMC news completely caught them off guard. They said despite the sell-off they still don't view STEC as a value play at this level. They are telling investors to "move to the sidelines as we think the stock will likely be range bound until we have better visibility on (1) integration rates of SSDs, (2) customer production ramps, (3) competitive landscape, and (4) 2010 SLC NAND pricing." The firm cut their price target from $39 to $18 and downgraded the stock to Neutral.
The stock appears broken as any attempt to rally it off the lows has failed.
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