Beside competition from IBM, HP and Dell, EMC’s most significant competitor is NetApp. EMC is in a better position that NetApp since its revenues are comprised of a wide range of products. Moreover, EMC has more than three times NetApp’s revenue. NetApp’s revenue derived from a single segment, enterprise data storage systems, with storage arrays contributing nearly 70%. On the other hand, NetApp’s revenue growth is mostly organic and its balance sheet is strong. NetApp is poised for continued growth. Having said that, I anticipate the tough matchup to continue in the years ahead.
The Foolish bottom line
At current state, EMC is fairly cheap comparing to peers such as NetApp, VMware, Inc. (NYSE:VMW) and HP. I can only assume the “arbitrage gap” is about to disappear in matter of months. I strongly believe EMC’s good old days are not over yet. At a price around $22 per share, there is a better probability for upside rather than downside. The Pivotal venture and its IPO potential offer EMC Corporation (NYSE:EMC) investors an additional channel to profit. Furthermore, EMC’s expertise and experience in successful takeovers will sure turn beneficial down the road. I truly believe that EMC is a good buying opportunity now, and will sure deliver better results than peer at least in the foreseeable future.
The article Why You Should Buy This Undervalued Tech Stock Now originally appeared on Fool.com.
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