More on SNDK - (from SmartMoney):
smartmoney.com
excerpt:
Predicting this flash grab early on, Promethean SanDisk has focused on churning out modular
multimedia cards, or MMCs, double-density flash plug-ins that portable MP3 enthusiasts will need once
their players run out of song room. In early May, SanDisk struck a $700 million joint venture with Toshiba
to produce especially dense flash-memory units. These cards will hold at least four times the capacity of
currently available plug-ins and will directly appeal to owners of flash-thirsty PALM units, digital
camcorders and MP3 players alike.
SanDisk's concentration on MMC has paid off big. The company's most recent MMC revenues were up a
dazzling 81% quarter-over-quarter amid a 155% year-over-year surge in overall product revenues. The
entire flash-memory market has irrefutably hit the big time. While it grew admirably from $2.5 billion in
1998 to $4.5 billion last year, it's expected to explode to $10 billion in 2000, according to CNET.
Salivating at this market opportunity, SanDisk will burn the
midnight oil to produce 15 million units this year — three times its
1999 output. That might explain why this relatively unknown
company is expected to see its 2000 earnings per share
skyrocket 154% to $1.09 from last year's 43 cents. And so far this
year earnings haven't been too shabby. On July 19, the company
walloped the Street by reporting a second-quarter profit of 33
cents, compared with a consensus estimate of 22 cents.
All four analysts who follow SanDisk rate it at least a Buy and say
the company simply can't ship out its flash cards fast enough. (For
comparison, recall the 8Mb chip stampede that accompanied the
release of Windows 95.) According to Mark Edelstone of Morgan Stanley, the flash-card frenzy "won't
taper off much at all," especially as we near the holiday shopping season. Edelstone forecasts that the
confluence of surging demand and supply constraints will keep flash prices higher for the foreseeable
future, a major reason he rates SanDisk an Outperform with a $200 price target.
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