Lake Street Capital Initiates Coverage on Carbonite Inc with Buy Rating

Lake Street Capital Markets initiated coverage of Carbonite, Inc. CARB with a Buy rating and $16 Target Price on Thursday.

Analyst Eric Martinuzzi issued a report in which he expressed that Carbonite represents a “hidden growth story.”

According to the report, investors may still see Carbonite as an online backup service geared towards the slowing consumer market.  Martinuzzi argues that “the company is in the process of writing a second chapter of growth by attacking the SMB backup market with a new product and an expanded channel.”

Additionally, the company has released server backup software, a hybrid local and cloud storage backup appliance and is building out the reseller channel.

The report indicated that the Carbonite’s SMB business is expected to grow 35+ percent  between 2014 and 2015.  Disruptive pricing also gives Carbonite an advantage according to Martinuzzi, as the new hybrid backup appliance is offered as a service without any CapEx for the customer.

Carbonite Inc. traded at $10.31 late Thursday, up 3 percent.