NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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Highlights from the ratings report include:
- Although SNDK's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.51, which clearly demonstrates the ability to cover short-term cash needs.
- 38.40% is the gross profit margin for SANDISK CORP which we consider to be strong. Regardless of SNDK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SNDK's net profit margin of 9.50% is significantly lower than the same period one year prior.
- The revenue fell significantly faster than the industry average of 59.2%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of SANDISK CORP has not done very well: it is down 16.01% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
Sandisk Corporation designs, develops, and manufactures NAND flash memory storage solutions that are used in various consumer electronics products. The company has a P/E ratio of 10.5, equal to the average computer hardware industry P/E ratioand below the S&P 500 P/E ratio of 17.7. SanDisk has a market cap of $9.13 billion and is part of the
industry. Shares are down 23.9% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.