Key Highlights
- SNDK shares jumped 3.53% to $1,302.96 during premarket hours Friday, rebounding from Thursday’s earnings-related decline
- Delivered quarterly earnings per share of $39.25, crushing analyst projections by 13.9%; revenue reached $8.97 billion against $8.39 billion consensus
- CEO revealed that long-term supply agreements now account for 50% of anticipated fiscal 2027 output
- Company’s board greenlit an additional $14 billion share repurchase program, pushing total authorization to $15.5 billion
- Wall Street consensus maintains Buy rating with $2,114.77 mean price target
Shares of SanDisk (SNDK) surged 3.53% to reach $1,302.96 during Friday’s premarket session, recovering losses sustained in Thursday’s trading following the company’s quarterly financial disclosure.
The previous session’s decline seemed puzzling given the strong numbers. The memory storage manufacturer reported earnings of $39.25 per share, handily surpassing the Street’s $34.45 projection by 13.9%. Total revenue registered at $8.97 billion, crushing expectations of $8.39 billion and representing substantial growth from the prior year’s $1.9 billion.
What triggered the selloff? Market participants focused on cautious near-term revenue projections and raised concerns about margin sustainability as the memory sector evolves.
Strategic Shift Toward Extended Contracts
In comments to Reuters, CEO David Goeckeler outlined the company’s strategic pivot: Sandisk has transitioned from short-cycle transactions to extended purchase commitments. These arrangements now carry a median term of four years.
The manufacturer currently maintains eight such agreements across six different clients, representing a combined minimum value of $93.9 billion. Management projects these contracts will account for 50% of fiscal 2027 manufacturing capacity and approximately two-thirds of fiscal 2028 production.
Since April, the company has executed five new agreements—three with previously unaffiliated customers and two representing expansions of existing relationships.
Additionally, the board authorized a fresh $14 billion stock buyback initiative, elevating the company’s total remaining repurchase capacity to $15.5 billion.
Analyst Perspectives
The investment community largely maintained its positive outlook despite the volatile price action.
Evercore ISI adjusted its price objective downward to $2,800 from $3,100 while preserving its Outperform designation. The firm highlighted that anticipated gross margins between 83% and 85% exceeded Street expectations, while emphasizing the demand clarity provided by new long-duration agreements.
Morgan Stanley retained its Overweight stance and $1,750 projection, citing resilient NAND market fundamentals. Wedbush maintained its Outperform rating with a $2,000 target, suggesting the company may be adopting a deliberately conservative guidance approach.
Jefferies reduced its target to $1,750 from $3,000. Goldman Sachs attributed some of Thursday’s pressure to elevated investor expectations entering the print, cautioning that the tempered outlook might pressure peers like Micron (MU).
Among more reserved voices, RBC Capital maintained its Sector Perform designation while lifting its target to $1,300. Wells Fargo held Equal-Weight and reduced its objective to $1,400. Citigroup kept its Buy rating but lowered its target to $2,100.
Aggregate analyst sentiment reflects a Buy consensus, with mean price target standing at $2,114.77. Current valuation implies approximately 17.1 times forward earnings.
From a technical perspective, SNDK is trading roughly 49% above its 200-day simple moving average, though currently positioned 9% under its 20-day SMA and nearly 24% beneath its 50-day SMA. Critical support appears near the $1,277.50 level.
The MACD metric remains positioned above its signal line, suggesting diminishing downside momentum. Benzinga Edge assigns SNDK a Momentum Score of 99.87 while noting a modest Value Score of 22.15.
Broader equity indexes provided supportive conditions Friday morning, with Nasdaq futures advancing 0.48% and S&P 500 futures rising 0.19%.
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