SanDisk Wins $28.5M Patent Suit - Analyst Blog
13 March 2014 - 5:00AM
Zacks
Flash storage solutions provider SanDisk Corp.
(SNDK) received a favorable verdict in a patent infringement
lawsuit against PNY Technologies. The jury sided with SanDisk and
awarded $28.5 million in damages for the breach of license
agreement.
SanDisk has a strong portfolio of 4900 patents related to memory
storage and management, and the current verdict reaffirms the
company’s vigor in defending its patents from any possible breach.
Moreover, the claim of damages ensures that SanDisk’s patents can
be monetized through licensing agreements with other storage
providers.
SanDisk is benefiting from the growing demand for solid state
drive (SSD) products and over the time has also made significant
investments to launch new and innovative SSD products to cater to
the pent up demand. With these launches, we expect SanDisk to
strengthen its market position against competitors such as
Micron (MU) and Fusion-io
(FIO).
Per technology research firm Gartner, the total SSD market is
poised for a considerable growth, with revenues projected at $19.4
billion in 2014 from $9.2 billion in 2012. Thus, SanDisk is
expected to grab 10–12% revenue share by 2014 from 3–4% at the end
of 2012.
Buoyed by these factors management also remains positive about
SSD revenue growth, favorable product mix and better supply/demand
metrics in 2014 but expects modest price decline. The company
expects bit supply to increase in the range of 25% to 35%.
Nonetheless, lower average selling price per gigabyte could
hamper SanDisk’s top line. Moreover, lackluster PC sales,
European issues, competition from its peers and currency
fluctuations could hurt fundamentals to some extent.
Currently, SanDisk has a Zacks Rank #3 (Hold). Investors can
consider a better-ranked stock like Juniper
Networks (JNPR) which sports a Zacks Rank #1 (Strong
Buy).
FUSION-IO INC (FIO): Free Stock Analysis Report
JUNIPER NETWRKS (JNPR): Free Stock Analysis Report
MICRON TECH (MU): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis Report
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