SanDisk Earnings Divide Investors Over Guidance
SanDisk earnings beat but cautious fiscal Q1 guidance and a slightly lower margin range sparked an extended-trading selloff and analyst target trims.
KEY TAKEAWAYS
- Reported fiscal Q4 beat while guiding fiscal Q1 revenue to $10.3B to $10.8B and EPS $44 to $46.
- Guided non-GAAP gross margin 83.0% to 85.0%, lower than prior 84.6%.
- Shares fell nearly 8% in extended trading after the guidance, prompting analyst target trims.
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SanDisk Inc. said on Aug. 5 that while revenue momentum remained strong, its forward outlook fell short of some market expectations, triggering a post-earnings selloff and renewed debate among analysts over whether NAND memory margin strength can be sustained.
Quarterly Results and Guidance
SanDisk reported fiscal fourth-quarter 2026 results that beat analysts’ estimates, posting a non-GAAP gross margin of 84.6%. The company forecast fiscal first-quarter 2027 revenue between $10.3 billion and $10.8 billion, exceeding a widely used estimate but with a profit midpoint below some other data-provider forecasts. It set adjusted EPS guidance of $44 to $46 on a 155 million fully diluted-share basis and projected a non-GAAP gross margin of 83% to 85%, slightly below the prior quarter’s margin.
The company attributed revenue momentum to strong demand for AI data-center memory chips and tight NAND pricing. Despite the upbeat revenue forecast, SanDisk’s stock fell nearly 8% in extended trading after the guidance.
Analysts and Valuation Debate
Following the selloff, several major brokerages, including Citi, Wells Fargo, Evercore ISI, and Jefferies, trimmed price targets while maintaining mostly positive ratings. The consensus analyst rating remained Buy.
Market commentary split between those who argue that tight NAND supply and AI-driven data-center demand can sustain unusually high NAND memory margins and those who view valuation as stretched after a rapid rally. This debate over margin durability and valuation is likely to shape investor assessments of SanDisk stock going forward.
