UPDATE: Deutsche Bank Initiates Coverage on Violin Memory with Buy Rating, $10 PT on Blue Sky Opportunity in Flash Storage

In a report published Tuesday, Deutsche Bank analyst Chris Whitmore initiated coverage on

with a Buy rating and $10.00 price target. In the report, Deutsche Bank noted, “We believe Violin is well positioned to benefit from strong secular growth of flash in the enterprise. Violin's industry-leading price/performance characteristics, strong value proposition vs. HDDs and IP position should translate into robust growth over multiple years. In the medium term, we believe new products (19nm, PCIe) and increasing SW attach will translate into strong growth and expanding margins. As VMEM progresses towards its long-term margin model, we expect VMEM's multiple to expand. Our $10 PT assumes that VMEM trades at 4x CY14 EV/Rev and is backstopped by a DCF.” Violin Memory closed on Monday at $7.30.