DATA CENTERS

  • 09/05/2001
    7:30 PM
  • Network Computing
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Datalink

Publicly held reseller and integrator banks on SAN sales to help it rebound from slow Q2
With no products of its own, how does Datalink Corp. (Nasdaq: DTLK) make money in the storage networking market?

Simple -- by selling everyone else's.

As perhaps the only publicly held pure reseller/integrator in the storage networking market, Minneapolis-based Datalink is somewhat isolated from the business turbulence that can hit individual vendors, a position that might normally attract cautious investors seeking an entre into the storage arena.

Of course, when the entire market is in decline, there's also no place for a reseller to hide. Given the current chilly conditions in the IT purchasing world, it's no surprise that Wall Street has cooled a bit toward Datalink's stock (currently trading around $8 per share), with some analysts cutting ratings on the heels of the company's disappointing second quarter.

Analysts from C.E. Unterberg Towbin, for example, lowered their rating on Datalink from Strong Buy to Buy, after the company reported a loss of $623,000 (-7 cents per share) for the period ending June 30. However, most firms covering the company maintain a Buy rating with a 12-month target price of between $10 and $13, saying that Datalink's revenues should rebound when overall economic conditions improve.


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