SanDisk (SNDK) Stock Gains Today on Flash Storage Announcements

SanDisk (SNDK) is gaining Wednesday following a series of new flash storage announcements.

Author:: Lindsay Ingram
Publish date:: Mar 4, 2015 1:58 PM EST

NEW YORK (TheStreet) -- Shares of SanDisk (SNDK) were gaining 4.5% to $82.61 on Wednesday following the memory maker's recent flash storage and array and mobile storage announcements.

On Tuesday, SanDisk announced a new a new all-flash storage platform for the IT industry called InfiniFlash. The new SanDisk InfiniFlash storage system consists of up to 64 specially-designed, hot-swappable cards that each have 8TB (terabytes) of storage capacity for a total of 512TB, or half a petabyte, in a 3-rack-unit enclosure.

The InfiniFlash storage system can connect to up to eight off-the-shelf servers, and uses open source software to offer "extreme performance, and superior reliability to big data and hyperscale workloads," according to SanDisk.

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"Building on our long history of industry-defining innovation, we are very excited to bring our first all flash array storage system to market in the form of a category-defining product that we expect will drive flash into big-data workloads at massive scale," Executive VP and Chief Strategy Officer Sumit Sadana said in a statement.

Earlier in the week at the Mobile World Congress trade show in Barcelona, SanDisk announced a new microSD card that can hold a record-breaking 200GB of data, which can more than double the storage capacity of most mobile devices. The company also announced a new NAND flash module for smartphones and tablets that can support transfer speeds of up to 1Gbps.

TheStreet Ratings team rates SANDISK CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SANDISK CORP (SNDK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The revenue growth significantly trails the industry average of 30.9%. Since the same quarter one year prior, revenues slightly increased by 0.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, SANDISK CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
48.54% 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 11.63% is significantly lower than the industry average.
Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.50 is sturdy.
SANDISK CORP's earnings per share declined by 40.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SANDISK CORP reported lower earnings of $4.23 versus $4.37 in the prior year. This year, the market expects an improvement in earnings ($5.28 versus $4.23).
You can view the full analysis from the report here: SNDK Ratings Report