SanDisk Corp. (SNDK) recently hit a new 52-week high at $32 after breaking above a short-term level of resistance at $23. The company is set to report its Q4 results on Jan 28, and if Q3 is any indication, investors should be pleased.
Company Description
SanDisk Corporation designs and manufactures NAND-based flash storage products for various consumer and industrial applications worldwide. The company was founded in 1988 and has a market cap of $6.8 billion.
Third-Quarter Results
Scandisks’ Oct 20, Q3 results included sales growth of 14% from last year to $935.2 million as total units sold increased 31% from last year. Earnings also came in strong at 67 cents per share, blowing past the Zacks Consensus Estimate of 14 cents.
The company gained in a couple of key categories, with gross profit expanding to 39% of revenue from 21% last year. SanDisk is also in the very favorable position of having a sizeable cash position insulating its balance sheet, with cash and equivalents totaling $2.58 billion.
Estimates Jump
With the company’s Q4 results only days away, estimates jumped higher. The current year added 4 cents to 99 cents while the next-year estimate is up 10 cents to $1.09, a solid 10% growth projection.
After a year of big gains, shares of SNDK are a bit pricey, trading with a P/E multiple of 30X, a premium to the overall market.
The Chart
Shares of SNDK had been trending higher for most of the last year before breaking above the short-term level of resistance at $23 and surging. Look for support at the longer-term trend line on a pull back. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
