Wedbush Met With SanDisk Execs; Here's What Happened

In a report published Wednesday, Wedbush analyst Betsy Van Hees maintained a Neutral rating on SanDisk Corporation SNDK, with a price target of $52, after meetings with the management highlighted opportunities in client platform solutions.

SanDisk indicated that it has split its business focuses into two segments - client and enterprise platforms. Within the client platform business, the company is focused on delivering its portfolio of SSDs, removable solutions, and components across:

• Computing - including PCs, notebooks and Chromebooks
• Mobile devices - including smartphones and tablets
• Connected home - including gaming and STBs
• Automotive, Internet of Things (IoT) and industrial

SanDisk said it believes that the consumer market has so far been restricted by consumer’s preference for higher capacities and price sensitivity. Since price points on SSDs are now closing the gap with HDDs, the company expects growth in the consumer notebook PC adoption rates to rise about 5 to 10 points over the next couple of years.

SanDisk noted that it had lost a major client SSD OEM customer due to a change in its business model. As a result, the company had altered its own business model and "has been working with certain customers on more embedded component solutions," the Wedbush report noted.

"We were very impressed with Mr. Henry and we came away from our meeting encouraged by SNDK’s focus on right sizing its business and LT growth opportunities across its client and enterprise businesses. However, this is not an overnight fix, and we continue to see 2015 as being a challenging year for SNDK," analyst Betsy Van Hees wrote.