Limited Upside to SanDisk from Growth in USB Flash Drive Market

by Trefis Team
-7.99%
Downside
93.24
Market
85.79
Trefis
SNDK
SanDisk
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SanDisk (NYSE:SNDK) sells USB flash drives to retail consumers under the brand name SanDisk Cruzer.  It competes with companies like Sony (NYSE:SNE), Imation (NYSE:IMN), Kingston, Lexar, and Memorex in this segment.  We currently have a Trefis price estimate of around $50 for SanDisk’s stock, about 11% above the current market price of around $45.

Trefis members have created forecasts for two key drivers of SanDisk’s stock over the last week: (1) SanDisk Market Share of USB Flash Drives and (2) Global USB Flash Drive Units. The members’ forecasts suggest that SanDisk Market Share of USB Flash Drives and Global USB Flash Drive Units will trend above the Trefis forecast. These projections suggest a combined upside of around 1% for SanDisk’s stock.

We estimate that USB Flash Drives constitute around 2% of the $50 Trefis price estimate for SanDisk’s stock. Hence the stock is not much impacted by (1) SanDisk Market Share of USB Flash Drives and (2) Global USB Flash Drive Units. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. SanDisk Market Share of USB Flash Drives

The average of forecasts for SanDisk Market Share of USB Flash Drives created by Trefis members indicated a projected decrease from around 29% in 2010 to around 28% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 22.5% in 2010 to 24% by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for SanDisk’s stock. In the past, SanDisk Market Share of USB Flash Drives has increased from 12% in 2005 to around 22% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of SanDisk’s stock to Sandisk Market Share of USB Flash Drives.

Our complete analysis for SanDisk Market Share of USB Flash Drives is here.

2. Global USB Flash Drive Units

The average of forecasts for Global USB Flash Drive Units created by Trefis members indicated a projected increase from around 198 million in 2010 to 283 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around 188 million in 2010 to around 264 million by the end of the Trefis forecast period. The member estimates imply very little upside to the Trefis price estimate for SanDisk’s stock. In the past, Global USB Flash Drive Units has increased from close to 88 million in 2005 to around 171 million in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of SanDisk’s stock to Global USB Flash Drive Units.

Our complete analysis for SanDisk’s stock is here.

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