Editor's Note: 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. NEW YORK ( TheStreet) -- SanDisk (Nasdaq: SNDK) 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- Although SNDK's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average. To add to this, SNDK has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 50.61% to $315.63 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 34.27%.
- 43.00% 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 13.85% is significantly lower than the industry average.
- SANDISK CORP's earnings per share declined by 23.7% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SANDISK CORP reported lower earnings of $1.69 versus $4.04 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $1.69).
- SNDK, with its decline in revenue, underperformed when compared the industry average of 18.0%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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