Everpure (P) PT Raised to $215 at Guggenheim
Guggenheim analyst Howard Ma raised the price target on Everpure (NYSE: P) to $215.00 (from $150.00) while maintaining a Buy rating.
The analyst commented: "We recap our takeaways from multi-city investor meetings with Everpure’s CFO Tarek Robbiati and VP IR Paul Ziots and introduce supplementary analyses of enterprise storage capacity vs. pricing trends and Everpure’s hyperscaler opportunity. Taken altogether, we remain optimistic about the potential upside to what are already exceptionally high targets. We’re raising our PT to $215 (from $150), which implies 33x FY28E non-GAAP P/E using our plausible estimate (vs. 24x currently) and 27x EV/FY28E FCF (vs. 19x currently). Mr. Robbiati reinforced his investor day message that Everpure is at a positive inflection point across its entire business. Considering there is typically only 2-3 quarters of visibility into enterprise storage pipelines, the initial outlook for 39-45% growth and 24-26% operating margin in FY28 followed by “Rule of 50-70” in FY29-FY30 factors in significant contribution from hyperscaler customers, neoclouds, and expansion via the data primacy strategy. For hyperscalers, by far the largest piece, shipments are contracted well into CY28/FY29, the LT outlook doesn’t require a 3rd customer, and we believe ASP is correlated to NAND prices. We estimate roughly 60 EB of DFM opportunity in CY27 growing to 140 EB in CY29 within Everpure’s two customers, while growing flash mix vs. HDD, higher DFM mix vs. flash, and prices eventually coming down could all provide upside. In the core business, Mr. Robbiati was clear that durable growth will never be driven by price, and more importantly, Everpure has consistently gained market share regardless of NAND prices. Industry-wide capacity growth seems to be holding up despite higher prices, while I&O leaders point to on-premise inference demand and data center repatriation as structural trends. In our view, the relative value of Everpure’s DFMs vs. SSDs holds regardless of NAND prices, but on the way down its efficiency shines through more, and should reopen the HDD opportunity, still a long-term catalyst."
