UPDATE: FBN Securities Reiterates Outperform Rating, Raises PT on Datalink Corporation on Strong FQ4 Report

In a report published Friday, FBN Securities reiterated its Outperform rating on Datalink Corporation DTLK, and raised its price target from $11.00 to $13.00. FBN Securities noted, “We retain our Outperform rating on DTLK and raise our PT from $11 to $13 following a strong FQ4 report. DTLK recovered from FQ3 (when it preannounced a roughly 11% revenue shortfall) quite nicely, with revenue growth of 28% Y/Y (17% organically, without the acquisition of StraTech, which closed on Oct. 4) and organic NG EPS growth of ~19%. The company benefited from about five deals which pushed out of FQ3, but it ended the year with record backlog and a strong sales pipeline. DTLK is benefiting from an improving overall spending environment (note that DTLK is not really exposed to US Federal, where there is more risk) and from ramping business with Cisco (which roughly tripled in 2012) and EMC (which more than doubled in 2012). The GM decline (to 22.7% from 22.9% in FQ3) is not too worrisome, as 1.) DTLK pursued about $3.2M of low-margin VMware business to take away opportunities at competitors, and 2.) DTLK grew its (lower-margin) networking and server category well.” Datalink Corporation closed on Thursday at $9.27.