SanDisk's Stock Prices Catches Up To It

Sandisk traded below $38.50 after hours on Friday, very close to its 52-week low. The company has traded as high as $66.20 in the last year.

The company is firing 10% of its workforce, bending to the reality of failing prices for memory chips. The price for NAND flash memory chips has fallen an astonishing 50% in the last 2 months.  Micron Tech (MU) made a similar warning on chip prices recently.

Interestingly, some analysts think the company is a buy. Morningstar says the company is cheap now. Royalties from companies like Samsung help diversity its diversify revenue. The company also makes most of its chips in its own fabs which allows it to use low priced technology that is fairly new.

Sandisk is down more than Micron over the last year.

But, one key measure would seem to make Sandisk expensive. Over the two years, the price of the stock is up over 50%. By contract, large chip company Intel (INTC) is down. They are not is exactly the same business, but they are in the same sector. By that measure, Sandisk could move much lower.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.