) is well set on the growth trajectory, gathering momentum from its
positive earnings surprise history and strong fundamentals. Shares
of this flash memory storage provider have been rising since the
company released its first quarter fiscal 2014 results on Apr 16,
2014. Since the release, the stock price has moved up 25.6%.
Driven by strong client and enterprise solid state drive (SSD)
sales, strength in retail businesses and favorable supply/demand
metrics, the company posted solid first quarter 2014 results.
Adjusted earnings of $1.32 per share soared 70.2% year over year
and surpassed the Zacks Consensus Estimate of $1.27 per share.
Providing further impetus to the stock in the quarter was its sales
performance. Sales escalated 12.7% year over year to $1.51 million,
attributable to strong demand for both client and enterprise SSDs.
Notably, SSD sales jumped 61% on a year-over-basis and comprised
28% of total revenue.
Moreover, this Zacks Rank #2 (Buy) stock has delivered a positive
earnings surprise in the last four quarters with an average beat of
18.7%, making investors optimistic about continued strength in its
performance. The company has a market cap of $20.6 billion and a
long-term expected earnings growth rate of 10.0%.
These factors combined to push SanDisk to a new 52-week high of
$93.17 yesterday, eventually closing at $92.72. The closing share
price represents a robust one-year return of about 60.1% and
year-to-date return of about 33.6%. Average volume of shares traded
over the last three months stands at approximately 3,807K.
The recent price appreciation can be attributed to the growing
demand for its SSD products. The company has also launched several
new and innovative SSD products to cater to pent-up demand.
The newly-launched X300s SSD will cater to the needs of emerging IT
enterprises, secure data and enhance the performance of data
centers and client computing devices. With the new product
launches, we expect SanDisk to strengthen its market position
against its competitors such as
Moreover, to further secure the newly-launched X300s SSD, SanDisk
) Embassy Security Center (ESC) encryption software for free. The
software offers a user and password set-up, which provides an extra
layer of security for enterprises using the SSD. We believe that
the Wave Systems partnership will be good for SanDisk as it will
enable the company to offer products with enhanced security at a
As things stand now, we believe that the company remains well
positioned to sustain its robust performance, helped by the
acquisition of SMART Storage Systems and its offering in the
Enterprise SSD segment.
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