ML released their new (traditional read) research report on NTAP a few minutes ago titled, "Network Appliance SweetNAS." The report was written by Steven Milunovich and William G. Crawford and rates NTAP a BUY, BUY with a 12 month target of $185. It gives NTAP a 45% estimated growth for the next 5 years. Here are the highlights:
12 Month Price Objective: $185
Estimates (Apr) 1999A 2000E 2001E
EPS: $0.23 $0.41 $0.60
Investment Highlights:
· NAS is becoming a mainstream technology
with significant demand pull in e-business
applications, now 40% of sales.
· Valuation is a stickler, but we're not overly
concerned given that NetApp could be the
next EMC. Our price objective of $185 is 35X
our F2001 revenue estimate of $922 million.
· The company announced a 2-for-1 stock split,
the second in as many quarters.
Fundamental Highlights:
· Revenue of $151 million handily beat our
estimate, doubling year-over-year. The sales
cycle has shortened and sales productivity is
up 10% from last year.
· Management spent most of the upside on sales
force expansion and increased customer and
professional services support. EPS of $0.11
beat our estimate by a penny.
· NAS may be a disruptive technology,
undercutting server-attached storage in the
long run. George Gilder's storewidth view
argues that NAS “wastes” the “cheap”
technologies of drives and bandwidth while
SANs depend on more expensive
microprocessors and labor.
[end of report]
Going back to Steve's bulletin I posted segments from yesterday, I think you just might have been right, Mehitabel, that despite the Gilder influence, Steve is in love. After all, that bulletin was released on Valentine's Day.
Regards,
Lynn |
