SanDisk Corporation (NASDAQ:SNDK) cut its revenue outlook for the year to $1.3 billion for the quarter ending March 2015 from $1.45 billion it had forecast in January. Shares tanked by as much as 19% to a new 52-week low of $66.11 due to the bad news and the company withdrawing its other forecasts, which are expected to be below par. The company will however, release first quarter earnings report in mid-April. The previously scheduled May 2015 Investor Day has also been postponed to a later date.
The revision of the first quarter revenue estimate is due to lower than expected sales, lowering of prices and an unspecified “product qualification delay”. This makes a total of two shortfalls in back to back quarters indicating that the problems faced by the company are not quick fix and involve a deeper malaise. SanDisk has been attractive to investors because it is a pure play in the market for NAND, the type of flash memory deployed on smartphones, laptops, and other mobile devices. As such, the company has benefited from the explosive growth in demand for these products.
CEO, Sanjay Mehrotra, expressed his disappointment at the financial outlook of the company and vowed to work through “headwinds, leveraging our compelling product roadmap and broadening customer base.”He also expressed hope in the 3D NAND technology in turning around the fortune of the company.
SanDisk Corporation (NASDAQ:SNDK) is the market leader in flash memory and has been defended by many analysts. Some analysts believe that the drop in prices of the shares present a good entry point for new investors while others believe that SanDisk’s dismal run will continue. In a competing analyst call, the firm BTIG reportedly has downgraded SanDisk to ‘Neutral’ from ‘Buy.’ One way or the other it cannot be argued that investors now have to face the reality of a 52-week low for refusing to accept that SanDisk is faltering again. Shares of SanDisk went down 17% at $67.33 shortly after opening on Thursday. SanDisk has a consensus price target of $91.94, which is all but sure to be dropped given the latest reports.