Roth Capital Assumes Dot Hill (HILL) at Buy

Roth Capital assumed coverage on Dot Hill (NASDAQ: HILL) with a Buy rating and a price target of $8.50. Analyst Brian Alger thinks the stock deserves to trade and a premium to peers, and he sees further upside as it continues to benefit from its strategic positioning.

"We see Dot Hill as benefiting from its strategic position as the last remaining pure OEM solution provider for storage systems. Two years of profitable growth and recent record profit margin indicate the strategy is working. We expect additional share gains and strong market dynamics to drive continued margin cash flow expansion over the next several years," said Alger.

"Dot Hill's past two quarters indicate to us that the company's RealStor technology is driving material share gains and expanding OEM adoption. Notably, just last week Lenovo announced a new line up of storage solutions utilizing HILL's technology," continued the analyst. "A renewed focus on expanding relationships beyond the server OEMs has driven share gains, and margin expansion over the past two years. We believe this strategy is just starting to gain traction and expect further penetration to enable better predictability and stronger profit margins."

Alger added, "With no debt, five quarters of positive FCF, and increasing projected market share and profitability, we believe HILL should trade at a premium to its slower growth peers."

For an analyst ratings summary and ratings history on Dot Hill click here. For more ratings news on Dot Hill click here.

Shares of Dot Hill closed at $7.06 yesterday.

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