The shifting preferences in the way corporations choose to store their data is having a negative impact on the margins of Eden Prairie-based Datalink. Efficiencies in cheaper flash array storage allows companies to buy more storage for less.
Lake Street Capital Markets analyst Eric Martinuzzi wrote in a note Thursday that Datalink's profit margins, which once had been around 22 percent, have declined to around 18 percent.
In Datalink's earnings release on Wednesday the company said that "volatility of current IT spending patterns" has led it to eliminate quarterly guidance for the near future. The company did provide yearly guidance saying that 2016 annual revenue will grow between 4 percent and 6 percent.
Martinuzzi wrote that "the outlook for 2016 revenue was better than we thought it was going to be." He is predicting Datalink's 2016 annual revenue will be $780 million but maintains a "hold" rating on Datalink.
Currency woes, pricing pressures affect Ecolab
Analysts from Zacks offered a sell rating on St. Paul-based Ecolab Inc. in a research note following its quarterly financial report. They wrote Wednesday that fourth-quarter 2015 results were impacted by foreign currency exchange rates and that a strengthening U.S. dollar and pricing pressures in Ecolab's energy segment will continue to impact the global provider of cleaning, sanitizing, food safety and infection prevention and energy products.
The analysts do expect some growth. "We believe that a robust product portfolio, new product launches and an expanding customer base will drive organic sales," they wrote.
Analyst: Silver Bay Realty an M&A target
The sudden resignation of Silver Bay Realty's CEO in January and subsequent corporate actions by the Minnetonka-based real estate investment trust lead one analyst to conclude at the time that the company wouldn't put itself up for sale.
Several weeks later and with the stock price generally moving down, a different analyst, JMP Securities' Peter Martin, wrote on Feb. 19 that odds of a strategic alternative have "incrementally increased."
"We believe the company is a prime candidate to either merge with a larger operator or liquidate assets," Martin wrote.
A JMP update last week after Silver Bay reported fourth-quarter results affirms Martin's assertion that the company is a potential M&A target and maintains a "market outperform" data.
