Citi Just Highlighted 2 Catalysts that Could Send SanDisk Stock Soaring Another 55%

SanDisk (SNDK) stock has taken some beating in the last two weeks, after the stock nearly tripled in a matter of weeks on the increasing demand for memory chips. As is always the case, many had started calling it a dangerous rally as the stock went past the $1,500 mark. Citi analysts have now come up with their assessment of the situation, and there’s good news for the bulls: The investment firm has set a $2,025 price target for the stock, reflecting another 45% upside.

It is hard to back a stock to gain another 45% when it is already up 54% in a month. But Citi has good reasons to be bullish on the stock. The main reasons are the gross margins and the pricing power. The 80% gross margins that the company is now enjoying showcase how strong its pricing power is in the current environment. Just one year ago, the number stood at 26.4%. That’s not all. The operating expenses aren’t increasing as much as the top line is, which shows the company is managing the high demand efficiently. The profitability and the business momentum are likely to stay strong going forward, which is where Citi’s optimism comes from.