SanDisk’s Stock Prices Catches Up To It

By Douglas A. McIntyre Published Feb 18, 3:25PM EST

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Sandisk traded below $38.50 after hours on Friday, very close to its 52-week low. The company has traded as high as $66.20 in the last year.

The company is firing 10% of its workforce, bending to the reality of failing prices for memory chips. The price for NAND flash memory chips has fallen an astonishing 50% in the last 2 months. Micron Tech (MU) made a similar warning on chip prices recently.

Interestingly, some analysts think the company is a buy. Morningstar says the company is cheap now. Royalties from companies like Samsung help diversity its diversify revenue. The company also makes most of its chips in its own fabs which allows it to use low priced technology that is fairly new.

Sandisk is down more than Micron over the last year.

But, one key measure would seem to make Sandisk expensive. Over the two years, the price of the stock is up over 50%. By contract, large chip company Intel (INTC) is down. They are not is exactly the same business, but they are in the same sector. By that measure, Sandisk could move much lower.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.