On Mar 24, 2014, we issued an updated research report on
) post better-than-expected fourth-quarter results.
Revenues from commercial and retail channels were strong,
aided by higher mobile embedded and solid state drive (SSD)
sales. Moreover, the acquisition of SMART Storage Systems is
expected to expand SanDisk's offering in the Enterprise SSD
SanDisk has been making considerable efforts to push its
client and enterprise-class SSD products and expects the SSD's to
account for around 25% of total revenue in 2014.
Per technology research firm Gartner, the SSD market is poised
for considerable growth, with revenues projected to more than
double to reach $19.4 billion in 2014, up from $9.2 billion in
2012. Thus, SanDisk is expected ideally to capture 10.0-12.0%
revenue share by 2014, up from 3.0-4.0% share at the end of
Moreover, given the increasing inclination of both individual
and corporate customers toward going mobile with tablets and
smartphones, the partnership between SanDisk and other original
equipment manufacturers to provide customized data storage
solutions seems to bode well. It is worth mentioning that
) is currently a major customer for SanDisk.
Additionally, the company's regular share buybacks and
dividend payments boost earnings per share and increase
Nonetheless, lower average selling price per gigabyte could
hamper SanDisk's top line. Moreover, lackluster PC sales,
European issues, competition from its peers, such as
), and currency fluctuations could hurt fundamentals to some
Additionally, customer concentration remains a headwind for
SanDisk. Revenues from its top 10 customers and licensees
accounted for approximately 49% of total revenue in fiscal 2013
compared to 43.0% in fiscal 2012, which is quite significant.
Loss of any customer or major licensee may reduce orders, thereby
impacting revenues and operating results.
Currently, SanDisk has a Zacks Rank #3 (Hold).
APPLE INC (AAPL): Free Stock Analysis Report
FUSION-IO INC (FIO): Free Stock Analysis
MICRON TECH (MU): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis
To read this article on Zacks.com click here.