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Pure Storage Continues Path To Disrupt IBM, EMC, NetApp In Storage

Pure Storage ( PSTG ) received an upbeat review ahead of its first-quarter earnings report next week, with an analyst saying the flash storage market appears to be growing faster than expected. Pacific Crest Securities analyst Brent Bracelin said Pure Storage appears to be gaining market share at the expense of legacy storage vendors including IBM ( IBM ), NetApp ( NTAP ) and EMC, which Dell is acquiring. “Reseller and partner feedback during March and April suggests demand for flash remains strong, particularly for Pure Storage,” Bracelin wrote in a research note. Pure Storage makes storage products based on flash chips, designed for the business enterprise market. Flash-based storage arrays are much faster than disk-drive storage systems but generally come at a higher price. Flash is seen as the future of storage, with that transition well underway but still in the early stages. The vast majority of the storage spend is still with the largest incumbents, including NetApp, IBM and EMC. Pure Storage is growing fast, but it’s still incurring large losses. Pure Storage continues to invest heavily to support a business model that is on pace to quickly scale to a $1 billion run-rate within five years after shipping its first product, Bracelin wrote. The company has $604 million in cash and no debt, and it remains on track to reach positive cash flow by the end of 2018, he said. “We estimate Pure’s revenue could grow by 60%-plus this year, driven by flash share gains,” Bracelin wrote. Pure Storage is set to report earnings after the market close Wednesday, for its fiscal Q1 ended April 30. The Wall Street consensus estimate on revenue is $138 million, up 86% year over year. The bottom-line consensus, as polled by Thomson Reuters, is for a per-share loss minus items of 23 cents, vs. a 26-cent loss in the year-earlier quarter. Pacific Crest continues to rate Pure Storage stock overweight, or buy, “based on the promising potential to build a next-generation storage franchise, strong balance sheet with over $600 million in cash, and the longer-term profit potential,” Bracelin wrote. Bracelin has a price target on Pure Storage stock of 24. The company came public in October 2015, raising $425 million with an initial public offering that priced 25 million shares at 17. Pure Storage stock was near 14.50, up 1%, in afternoon trading in the stock market today .

Dish Network Not Running Out Of Time On Spectrum Deal: Jefferies

Investment firm Jefferies added Dish Network ( DISH ) to its “franchise pick” stock list, saying Wall Street “has an overly bearish view” on the satellite TV broadcaster. Analyst Mike McCormack set a year-end 2017 price target of 80 on Dish stock, on views that its strategy of cobbling together radio spectrum for wireless or mobile video services will pay off. “We value Dish’s spectrum portfolio at nearly $45 billion on a pretax basis, or roughly $32 billion on a tax-adjusted basis,” McCormack said in a research report. Dish stock was up more than 3% in morning trading in the  stock market today , near 46, but it’s still down nearly 20% in 2016, and off 33% from a year ago. Dish has a low IBD Composite Rating of 19 out of a possible 99. Dish Network has amassed some 77 MHz of radio spectrum, spending some $15 billion in the process. However, the company lacks a wireless partner to deliver mobile video services over that spectrum. Verizon Communications ( VZ ) has stated it’s not interested in acquiring Dish Network’s spectrum but might be open to a wholesale network deal, analysts say. Dish — along with  AT&T ( T ), Verizon and  T-Mobile US ( TMUS ) — have filed as bidders in a federal auction of airwaves now owned by local TV broadcasters. The auction, begun in late March, might drag on until Q4. Depending on the auction’s outcome, wireless firms may be more or less interested in partnering with Dish Network or buying its spectrum. “We believe there are many outcomes and opportunities to realize value for Dish shareholders,” added McCormack in the report. “On concerns Dish is ‘running out of time,’ we believe there is plenty of time for various scenarios to unfold.”