Quantum has a strong-buy rating. How much could it gain?

Quantum has a strong-buy rating. How much could it gain?

The tech sector is one of the most profitable in the stock market. Technologies are an essential part of our lives. Various companies work tirelessly to satisfy the demand for new, and improved products worldwide. Furthermore, this sector is quite diversified. It contains not only internet or technology stocks, but also medical stocks. During the coronavirus pandemic, lots of them managed to stay afloat. Most of the pharmaceutical corporations skyrocketed.

While Quantum Corporation isn’t medical stock, it still has the potential to amass hefty gains. This small-cap company offers storage and archiving solutions for data streams, in both virtual and digital environments. Its products allow customers to store, protect, and preserve digital data for the long term.

In the world of computers and the internet, digital data storage is an essential service. Quantum Corporation’s last fiscal third-quarter report is good evidence to prove it. The company surpassed the earnings forecast with flying colors. It’s EPS reached 7 cents, versus estimates of only 1 cent. Net income jumped from $4.7 million to $9 million, almost doubling.

Furthermore, the stock’s total revenue was impressive $103.3 million. And it’s not all. The gross margin reached 45.6%, reflecting a value approach to selling a favorable product mix.

Do analysts recommend this stock?

Craig Ellis, the analyst at B. Riley FBR, noted that near-term business disruption caused lower F1Q product sales, but it was followed by F2Q-4Q growth. He thinks that Quantum Corporation will recover soon.

While the coronavirus caused many stocks to decline during the last few months, the pandemic seems to slow a little. Analysts are hopeful that the markets begin to rebound in the near future. Even if they warn that this process may be long and painful.

Ellis set Quantum Corporation’s price target at $6.25, with a 60% growth potential for the stock. The average price target of this stock stands at $5.75, indicating gains of 47% from the current share price of $3.90.

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