Most of this article's title is stolen directly from my colleague Tim Beyers' January assessment of memory-chip maven SanDisk (NASDAQ:SNDK). I am comfortable with the blatant theft because I feel like we've stepped through the looking glass or tumbled down the rabbit hole or whatever you do to experience deja vu.

In January, the firm was pounded despite 369% annual income growth because it warned that gross margins would be shrinking. Today, following first-quarter numbers, it is being pounded despite besting earnings estimates to put in a year-over-year increase of 100% in diluted earnings per share. The cause for worry: shrinking gross margins.

First-quarter revenues were up 122% from last year, to $387 million. Licensing and royalty revenues -- tasty, low-cost cash influxes that SanDisk collects from other flash makers for use of its intellectual property -- were up 153%. None of that could stop the bloodletting, as shares dropped 13% by this afternoon. Fans of Wall Street wackiness will be amused to learn that competitor Lexar Media (NASDAQ:LEXR) seems to be taking a sympathy beating today, down 10%.

Don't get me wrong, SanDisk's shrinking product margins aren't something to be ignored, but neither is the effect of the IP licensing. The royalty gravy sweetens overall gross margins to 40%, much better than the quarter's 32% on products -- the figures that sent the rats scurrying for the lifeboats.

If you ask me, that's a mistake. The prospects for flash technology are only getting better, as these handy memory chips are incorporated into everything from cell phones to new, ultra-cheap camera chips aimed at the disposable market. And the stock's recent drops mean it now trades for less than 24 times trailing earnings. Wow. Just today, Fool contributor Salim Haji wrote that there's a shoemaker out there -- a shoemaker, folks -- trading at a P/E of 37.

It's hard to find a tech leader with 100% growth in an expanding field that sells at a multiple like this. If your attention span is longer than a gnat's, you stand to profit by taking a look at the stock now.

Join the hand-wringing and mud-slinging on the SanDisk discussion board.

Fool contributor Seth Jayson began to believe in the flash memory industry when he discovered he owned four of the devices without even realizing it. He owns shares of SanDisk. View his Fool profile here.