One can estimate the earnings for the current fiscal year at about $4.00, including the one time gain. That is a conservative estimate, and it could go much higher, depending on the resolution of the Lexar suit and many other factors. There were some shares trading at 108 after hours. That's a PE on current year estimate of 27. A PE of 60, or more than double the current level would not be out of line at all, given the commanding position this company holds in flash memories. We'll never see the price this low again. At a price of 150, the stock is still a bargain. We now have the three essential factors for a great company: (1) Cash flow sufficient to generate the needed capital for growth from internal sources. (2) Highly skilled management with a magnificent track record. (3) Proprietary technology. SanDisk stands a good chance of being as good a performer this year as QUALCOMM was last year.
Look at the details of the earnings report. The percentage gains over the same period last year, in terms of product sales, licensing and royalty, and operating earnings. And all of this gain is PRIOR to MP3, which is just now starting to take off. It is also prior to the new paradigm of buying books on the Internet, downloading them to your personal reader, and storing them on a CF or SD MMC in the reader. If this wasn't a blowout report, then I don't know what blowout means. Positively the most optimistic report I've seen from any of the more than 40 companies I follow.
Art |
