Markets
VMW

The Zacks Analyst Blog Highlights: SanDisk, Western Digital, EMC and VMWare

An image of a smartphone and a pen
Credit: Shutterstock photo

For Immediate Release

Chicago, IL - October 22, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the SanDisk ( SNDK ), Western Digital ( WDC ), EMC ( EMC ) and VMWare ( VMW ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Wednesday's Analyst Blog:

Where Stands the Digital Storage Stand-Alone?

Digital storage company SanDisk ( SNDK ) reported Q3 earnings today, the results of which are below. But its headline story remains its proposed acquisition by rival storage firm Western Digital ( WDC ) released earlier today, which plans to buy SanDisk for $19 billion, or $86.50 per share in a mostly cash deal.

Citing a number of easy synergies between the two companies, the joined digital storage facilitator will now enjoy economies of scale similar to that of the recently-announced acquisition of EMC ( EMC ) by Dell, Inc. And EMC is the parent company of VMWare ( VMW ), which announced its quarterly earnings yesterday after the bell. These companies will also be pressed to find competitive solutions regarding cloud-based computing, which has overtaken digital storage solutions over the past couple years.

In fact, the cloud computing space has become so important and instrumental to the world of Internet-based business and technology that the mere existence of stand-alone digital firms like SanDisk or VMWare -- or even EMC or Western Digital themselves -- is thrown into question, if not right at this moment then at least looking forward. Can we honestly say that in 5 years there will be any large data storage companies operating independently of a larger tech corporation?

Data storage used to be a hot commodity back when PCs and laptops ruled the roost of enterprise and personal digital communication. But with the onset of handheld devices, we've seen the hard-disk drive, flash memory, solid-state and data-center solutions businesses lose stature as a main focus within tech overall. Cloud solutions require lower storage costs and also provide easier, faster access and stronger security and recovery modes. Reducing the need to purchase and maintain hardware has helped make cloud-based solutions a top priority.

As such, digital storage firms have been seeing dwindling numbers in their earnings and revenues of late. And even though a company like SanDisk has managed to top earnings estimates more often than not in recent quarters, there is plenty of volatility in the space right now. SanDisk, a Zacks Rank #4 (Sell) stock prior to the Q3 earnings report, also has seen its Zacks consensus estimates for this quarter and next, as well as fiscal 2015 and 2016, drop noticeably over the past week, with projections for 2016 coming down even heavier.

All this said, SanDisk reported Q3 earnings results with 98 cents per share (accounting for stock-based compensation and other before non-recurring items) on $1.45 billion in sales. These numbers compare favorably to the Zacks consensus estimates of 65 cents per share and $1404 million, respectively.

Aside from the mega M&A deal with Western Digital, SanDisk developed key joint manufacturing deals with Toshiba and H-P in the quarter. And after dropping initially in after-market trading following the company's earnings announcement, SNDK shares are close to break-even. This followed a 2 percent gain in regular Wednesday trading, but the stock is still down roughly 20 percent year to date.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SANDISK CORP (SNDK): Free Stock Analysis Report

WESTERN DIGITAL (WDC): Free Stock Analysis Report

EMC CORP -MASS (EMC): Free Stock Analysis Report

VMWARE INC-A (VMW): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

VMW WDC

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More