Fusion-io shares set to gain on upbeat outlook
(Reuters) - Fusion-io Inc (FIO.N) shares were set to open around 25 percent higher on Friday after the storage drive maker projected strong growth next year on high demand, prompting at least four brokerages to raise their price targets on the stock.
The company expects revenue to grow 45 percent to 50 percent in fiscal 2013, which translates into revenue of $521 million to $539 million.
"We see this as fairly strong evidence that while competitors are chipping away at smaller opportunities, Fusion-io is likely winning the bigger PCIe deals in the market today," Sterne Agee analyst Alex Kurtz wrote in a research note.
PCIe or peripheral component interconnect express is used in laptops, desktops and enterprise data servers to serve as the primary motherboard-level interconnect device.
Fusion-io also sells hard drives and software for use in servers and data centers through original equipment manufacturers like IBM Corp (IBM.N) and Dell Inc (DELL.O), as well as end customers like Apple Inc (AAPL.O) and Facebook Inc (FB.O), which engineer and operate their own server farms.
"We expect the growth in core versus strategic revenue to be a key metric to monitor in terms of providing a more stable base of revenue over the long run," JP Morgan Securities analyst Mark Moskowitz wrote in a note.
Fusion-io's gross margins also bounced back to 57.5 percent in the fourth quarter from a low of 51 percent in the second quarter.
Fusion-io shares traded at $26.21 before the bell on Friday, up 25 percent from the closing price of $21.02 on the New York Stock Exchange on Thursday.
(Reporting by Chandni Doulatramani in Bangalore)
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