Auriga Starts OCZ Technology Group (OCZ) at Hold; Not A Likely Winner in High Growth SSD Space - Price Reflects That View

Auriga initiates coverage on OCZ Technology Group (NASDAQ: OCZ) with a Hold. PT $5.00.

Auriga analyst says, "We believe the Enterprise SSD space will be a very high-growth technology segment over the next 3-5 years, but we believe that large new entrants are likely to drive most of the adoption at storage and server OEMs. As such, we see OCZ as a minor Tier 2 vendor at best (with sub 5% market share), with ultimate margins well below the company's current targets."

"Street estimates likely too low in near term, but appear a bit too high for F13. A combination of higher company-owned IP and increased enterprise mix could allow for upside to Street expectations over the next several quarters. However, we believe Street consensus is too optimistic for F13 (Feb), and we initiate with a F13 revenue estimate of $396Mn and a $0.55 pro-forma EPS estimate (ex-stock options or one-time items) versus the Street at $419Mn in revenue and $0.58 pro-forma EPS."

For more ratings news on OCZ Technology Group click here and for the rating history of OCZ Technology Group click here.

Shares of OCZ Technology Group closed at $5.25 yesterday.

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