Datalink, Corp. (NASDAQ: DTLK)
Technology; Data Storage Devices; 30%-35% Upside
Datalink is a data center service provider engaged in designing, deploying and managing data centers. The company also resells OEM products including servers, storage products and networking products. Datalink is a strong buy amid following reasons:
- Datalink offers flexible solutions from multiple vendors resulting in less risk from legacy storage headwinds.
- Strategy to pursue growth areas like private and hybrid cloud bodes well for the company.
- Datalink is a high profile player in data center infrastructure that is indicative of its competitive supremacy.
- DTLK is registering double digit growth, which was overshadowed by the earnings miss during Q1 2015.
We maintain a $13 price target for DTLK, which translates to an upside of around 30%. This price target attracts a multiple of 12.7 on forward consensus earnings indicating that the stock is undervalued. Note that Datalink's EPS is expected to grow 20% p.a. for the next five years. Detailed research can be accessed through First Movers.
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