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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (18066)	1/9/2001 1:58:49 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

SanDisk is now trading at about the same price it was in May of 1999... John, we are trading at less than 20 times 2001 EPS estimates. In 2000 I expect EPS to be triple that of 1999 ($1.29 vs. $0.43). There is a disconnect here between the growth rate and the multiple. My expectation is that a good Q4 would yield about $175 to $180 million in product revenues and about $25 million in royalties. If we had a spectacular Q4 we could match all of 1999 total revenues and all of 1999 EPS in Q4 alone. Maybe this is wishful thinking, but still in the realm of possibility IMHO. It would mean that the extra inventory that was acquired in Q3 would have shipped, that new '987 licenses were signed and paid in Q4, and that OEM MMC deliveries are on target. The dollar figures for 1999 total revenues were about $235 million. I think $200 to $210 million for Q4 is not an unreasonable guess. I can't see how SNDK could disappoint unless all of the anecdotal info presented here has been way off (sold out e-tailers, low retail inventories and booming consumer electronics sales from the holiday). The plain fact that both the Amazon site and the SanDisk storefronts had inventory shortages in December is telling. Also, BestBuy was criticized because of a lack of digital camera inventory during December. One analyst questioned whether they underanticipated digital camera demand. The thought of excess CF inventory, price slashing and eroded margins continues to haunt me. I must say I still am torn as to what the c.c. holds for us. I am still leaning strongly toward record sales, but remain cautious about Eli's comments on visibility. Best, Aus