NEW YORK (TheStreet) -- SanDisk (SNDK - Get Report) stock has had its price target increased to $125 from $105, Sterne Agee said Tuesday. The firm reiterated a "buy" rating following the announcement SanDisk would purchase Fusion-io (FIO) in an all-cash acquisition.
"We believe it underlines SNDK's L-T strategy of focusing on Enterprise SSDs and getting its accretive revenue mix from SSDs to 40% by 2017," analyst Vijay Rakesh wrote in the report. "With the deal closing in 3Q14, we believe conservatively FIO can drive SNDK F15E EPS to ~$7."
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- The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although SNDK's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. To add to this, SNDK has a quick ratio of 1.89, which demonstrates the ability of the company to cover short-term liquidity needs.
- SANDISK CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SANDISK CORP increased its bottom line by earning $4.37 versus $1.69 in the prior year. This year, the market expects an improvement in earnings ($6.00 versus $4.37).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 61.8% when compared to the same quarter one year prior, rising from $166.23 million to $268.95 million.
- The gross profit margin for SANDISK CORP is rather high; currently it is at 54.96%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.78% trails the industry average.
- You can view the full analysis from the report here: SNDK Ratings Report