Initiating Coverage. One Stop Systems is a leader in the High Performance Computing (HPC) space with a particular emphasis on the "AI on the Fly" and the migration to PCI Express (PCIe) Gen 4 spaces through the design and manufacture of custom servers, compute accelerators, solid-state storage arrays, and system expansion systems.

A Company of firsts. In spite of its relatively small size, OSS punches above its weight having been the first to market with PCIe interconnect products, the most powerful GPU Accelerator, and highest-density flash array.

Multiple avenues of growth. OSS is entering a period of potential rapid growth through a ramp-up of existing OEM and military design wins, winning new OEM and military design awards, and an ongoing acquisition program to expand the breadth and depth of the Company's offerings.

Rapidly growing High Performance Computing space. The worldwide HPC market is projected to grow from $38.4 billion in 2018 to $59 billion by 2025 as the HPC market expands beyond its traditional academic and scientific realms to broad application across numerous industries as companies seek to capitalize on the massive amounts of data being generated to obtain actionable insights.

Outperform rating with $4 price target. We are initiating coverage of One Stop Systems with an Outperform rating and a 12-month $4 price target. Our target represents an EV/S sales multiple of 1.1x projected 2019 revenue, a 50% discount to recent acquisitions in the space.

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