Storage Weekly Notes: Product Launches, Software Upgrades For Seagate, Western Digital And SanDisk

Hard drive manufacturers Western Digital (NASDAQ:WDC) and Seagate Technology (NASDAQ:STX) announced their fiscal Q1 2015 earnings in the last week of October, while flash storage provider SanDisk Corporation (NASDAQ:SNDK) announced its Q3 2014 results in mid-October. The stocks of these storage companies rose by 6-7% in the last week of October, while both the NASDAQ-100 and S&P-500 indices rose by 3% in that duration. In the first week of November, the stocks of these three storage companies rose by 2-3% early in the week before falling later in the week.

Seagate announced the general availability of its Kinetic Open Storage platform, which offers ethernet connectivity and intends to eliminate the need for storage servers. Western Digital released the operating system for its My Cloud personal cloud drives during the week. SanDisk announced the availability of X300 solid state drives (SSD) prior to earnings. Here’s a quick roundup on the developments in the storage industry.

Seagate Technology

Seagate announced the general availability of its Kinetic Open Storage platform, targeting the enterprise cloud storage market. This platform drastically changes the storage architecture. Each hard disk on the platform is connected via an Ethernet port and can be accessed across the Internet. In addition to the storage system, Seagate introduced kinetic hard disk drives based on the open storage platform. These hard drives use ethernet connectivity and each drive is assigned an individual IP address. ^[1] The less complex architecture ensures ease of maintenance and low power consumption, contributing to an estimated 50% reduction in total costs. ^[2]

• Trefis has a $58 price estimate for Seagate’s stock, translating into a $18.9 billion market cap. This is about 8% below the market price, which rose from $62 to $65 during the week before falling to under $63 near the end of the week.
• We estimate the company’s 2014 revenues to be around $14.5 billion and earnings per share of $5.71 in FY 2015, compared to a consensus of $5.22 according to Reuters.

See Our Full Analysis For Seagate Technology

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Western Digital

Western Digital released My Cloud OS 1.5 during the week, the app that allows user to access data from external hard drives connected to their personal computers from a different location via the Internet. The app has 4 million downloads to date for the iOS and Android versions combined. Western Digital’s My Cloud, a backup and unified storage solution for a single user or for a family to store data “in house”, is accessible across all devices including laptops, personal computers, tablets and smartphones across platforms such as Android, iOS and Windows.

• Trefis has a $100 price estimate for Western Digital’s stock, implying a market cap of $23.3 billion. This is roughly in line with the market price, which rose from $99 to $101 during the week before falling to $98 at the end of the week.
• We estimate the company’s 2014 revenues to be around $15.1 billion and earnings per share of $7.32 in FY 2015, compared to a consensus of $8.20 according to Reuters.

See our full analysis for Western Digital

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SanDisk Corporation

SanDisk introduced the availability of its X300 enterprise grade solid state drives (SSDs) prior to earnings. These 2.5″ form factor drives utilize SanDisk’s X3 flash technology, which involves triple layer cell (TLC) NAND, which promises improved efficiency while handling large workloads. These drives offer read/write speeds of almost 500 MB/s and 90,000 input/output operations per second (IOPS) at peak workload. These drives are available in all capacities ranging from 64 gigabytes to 1 terabyte. ^[3]

• Trefis has a $93 price estimate for SanDisk’s shares, translating into a $20.8 billion market cap. This is roughly in line with the current market price, which fell from $96 to $93 during the week.
• We estimate the company’s 2014 revenues to be $6.7 billion and earnings per share of $5.64, compared to a consensus of $5.82 according to Reuters.

See our full analysis for SanDisk

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Notes:

1. Seagate gives Ethernet-connected drives their own IP address, Computer Weekly, November 2014 [↩]
2. Seagate Disrupts Cloud Economics with storage that can cut infrastructure costs by 50%, VentureBeat, October 2013 [↩]
3. SanDisk Announces X300 SSDs, Anand Tech, October 2014 [↩]