STEC, Inc - (formerly SimpleTech, Inc.) (STEC)

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Broadpoint.AmTech Starts STEC (STEC) with a Buy

Broadpoint.AmTech initiated coverage today on STEC (Nasdaq: STEC) with a Buy rating and $23 price target.

The firm said the SSD market is still in the early stages of a secular growth story and is expected to expand from $246M in 2009 to $1.4B in 2013, a CAGR of 54%. The also said while competition will come, STEC first-mover advantage is sustainable.

The firm is forecasting EPS growth of 24% in 2010 driven by customer ramps.

The firm concluded, "STEC has declined by 67% from the September peak of $42.50 due to competitive concerns and near-term cloudiness in the EMC business. We view this pull-back as an excellent opportunity for investors to build positions. Catalysts include ramps at other tier one OEMs, EMC inventory issues getting resolved, and continued expansion of the enterprise SSD market. At $13.95, STEC trades at 5.7x our CY10 EPS estimate of $2.01, plus $2.54 in net cash."