TLDR
- SNDK rose 3.53% in premarket Friday to $1,302.96, recovering from Thursday’s post-earnings drop
- Quarterly EPS of $39.25 beat estimates by 13.9%; revenue hit $8.97 billion vs. $8.39 billion expected
- CEO says long-term purchase agreements now cover half of fiscal 2027 production
- Board approved a $14 billion buyback, bringing total remaining authorization to $15.5 billion
- Analyst consensus stays Buy with an average price target of $2,114.77
SanDisk (SNDK) stock climbed 3.53% to $1,302.96 in Friday premarket trading, bouncing back after Thursday’s sell-off that followed its quarterly earnings report.
That drop was a head-scratcher on the surface. Sandisk posted EPS of $39.25, beating the $34.45 consensus by 13.9%. Revenue came in at $8.97 billion, well above the $8.39 billion estimate and sharply higher than the $1.9 billion reported in the year-ago quarter.
So why did the stock fall? Investors zeroed in on softer-than-expected near-term revenue guidance and started asking whether those fat margins can hold as the memory market shifts.
Long-Term Deals Take Center Stage
CEO David Goeckeler spoke to Reuters and explained the company’s strategy: Sandisk has moved away from quarter-to-quarter deals in favor of long-term purchase agreements. Those contracts now carry a median duration of four years.
The company currently has eight agreements with six customers, collectively worth at least $93.9 billion. It expects half of fiscal 2027 production and two-thirds of fiscal 2028 output to be sold under those deals.
Since April, Sandisk signed five additional agreements, including three with new customers and two expansions of existing contracts.
The board also approved a new $14 billion buyback program, lifting total remaining repurchase authorization to $15.5 billion.
What Analysts Are Saying
Wall Street stayed mostly bullish despite the choppy reaction.
Evercore ISI cut its price target to $2,800 from $3,100 but kept its Outperform rating. The firm flagged that projected gross margins of 83% to 85% came in above consensus, and pointed to the new long-term agreements as a positive for demand visibility.
Morgan Stanley held its Overweight rating and $1,750 target, saying NAND demand remains durable. Wedbush kept its Outperform and $2,000 target, suggesting Sandisk may be playing it conservative on guidance.
Jefferies trimmed its target to $1,750 from $3,000. Goldman Sachs said high investor expectations likely added to the stock’s drop, and warned the softer outlook could also weigh on Micron (MU).
On the more cautious side, RBC Capital held its Sector Perform rating and raised its target to $1,300. Wells Fargo kept its Equal-Weight and trimmed to $1,400. Citigroup maintained Buy but cut to $2,100.
The overall consensus rating remains Buy, with an average price target of $2,114.77. The stock trades at roughly 17.1 times earnings.
From a technical standpoint, SNDK sits about 49% above its 200-day simple moving average, though it remains 9% below its 20-day SMA and nearly 24% below its 50-day SMA. A key support level sits around $1,277.50.
The MACD indicator is holding above its signal line, pointing to easing selling pressure. Benzinga Edge gives SNDK a Momentum Score of 99.87 but a Value Score of just 22.15.
Broader markets provided a tailwind Friday, with Nasdaq futures up 0.48% and S&P 500 futures gaining 0.19%.
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