QS Research · Michael Burry's Scion Capital analyst template · 2006
Sandisk Corp (SNDK)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +25% · downside -24% · upside +47%
The market is pricing a memory-cycle rollover: at $835.06 (N1) SNDK trades at 6.1x TTM P/E (N27), 5.4x EV/EBITDA (N24) and a 14.6% FCF yield (N28) with $5.14B net cash and $0 debt (N20, N18), while Q1 FY2027 beat and Q2 FY2027 is guided to $12.2-12.6B revenue and $55-57 non-GAAP EPS (S31). At today's 5.4x, TTM EBITDA of $21.15B (N11) gives EV of $113.68B (N22), essentially today's price; the 6.8x-8.0x case needs the NBM/long-term contract catalyst to justify a re-rating, not the valuation itself (S82, S84). Using that catalyst, a 6.8x base on $21.15B EBITDA gives $143.8B EV plus $5.14B net cash = $149.0B equity, +25.4% versus $118.82B market cap (N5); a 4.0x downside gives $89.7B, -24.5%; an 8.0x upside gives $174.3B, +46.7%. The long rule is not met because base is below +30% and downside is -24.5%, so this is a watch: valuation support is real, but peak-margin and memory-cycle risk leave insufficient margin of safety.
Key numbers
- Share price: $835.06
- Market cap: $118.82B
- Latest financial period: TTM to Oct 2, 2026
- Revenue (TTM): $28.97B
- EV / EBITDA (TTM): 5.4x
- P/E (TTM): 6.1x
- Price / book: 6.55x
The 15 boxes
- ✓ 1. Long-form business notes
Sandisk is a NAND flash memory company spun out of Western Digital on Feb. 21, 2025, selling SSDs, embedded storage, removable cards, USB drives, and wafers/components into Datacenter, Edge, and Consumer end markets. It is described as vertically integrated, but all flash memory wafers come from Kioxia joint ventures, which shapes supply and cost. The latest fiscal year shows a sharp step-up: revenue was $20.25B and operating income $12.39B for the fiscal year ended 2026-07-03, versus $7.36B revenue and -$1.38B operating income for the fiscal year ended 2025-06-27, with $11.67B operating cash flow and $4.52B buybacks.
- ✓ 2. Competitive advantage
Sandisk claims a brand, portfolio and innovation edge, and FY2026 shows real scale and cost leverage, but the 10-K describes a highly competitive flash market against vertically integrated giants and a manufacturing model tied to Kioxia/Flash Ventures. The record is not one of durable margins: operating income was negative in FY2023-FY2025 and turned to $12.39B in FY2026. The advantage looks narrow and cyclical, with IP and NBMs as supports but no proven pricing power.
- ✓ 3. 10-Q takeaways
Q1 2027 (three months ended Oct 2, 2026) was a step-change quarter: revenue $11,031M, up 378% Y/Y and 23% Q/Q, with Datacenter and Edge pricing/mix more than offsetting Consumer weakness. GAAP gross margin was 85.0% and operating income $8,780M; net income $8,101M included a $513M Nanya equity-securities gain, so operating earnings are the cleaner read. Q1 2027 operating cash flow was $6,363M and the company repurchased $5.0B of stock, leaving $10.5B on the repurchase authorization. Q2 2027 guidance is numeric: revenue $12.2–12.6B and non-GAAP diluted EPS $55.00–57.00 pre-split.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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