QS Research · Michael Burry's Scion Capital analyst template · 2006
Sandisk Corp (SNDK)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +24% · downside 0% · upside +47%
I use section 13's TTM-to-Oct-2-2026 base ($21.15B EBITDA, $19.42B net income, $5.14B cash, $201M leases, 142.29M shares) rather than averaging FY2023-FY2025 losses; that base is an upcycle record, so the 5.2x EV/EBITDA and 5.9x P/E are optically cheap but not cycle-normalized. Base case at MU's 6.5x EV/EBITDA: 6.5 x $21.15B = $137.48B EV; + $5.14B cash - $0.201B leases = $142.42B equity; / 142.29M = ~$1,001/share, +24% vs $806.43. Downside at today's 5.2x EV/EBITDA/5.9x P/E: 5.2 x $21.15B = $109.98B EV; + $4.94B net cash = $114.92B equity; / 142.29M = ~$808, roughly flat, and the P/E cross-check is 5.9 x $19.42B = $114.58B / 142.29M = ~$805. Upside at MU's 8.7x P/E: 8.7 x $19.42B = $168.95B / 142.29M = ~$1,187, +47%. Base is below the +30% long threshold and downside is not worse than -25%, so the rule gives watch: the market is discounting a memory downturn, but today's TTM earnings are too peak-like to underwrite a long.
Key numbers
- Share price: $806.43
- Market cap: $114.75B
- Latest financial period: TTM to Oct 2, 2026
- Revenue (TTM): $28.97B
- EV / EBITDA (TTM): 5.2x
- P/E (TTM): 5.9x
- Price / book: 6.33x
The 15 boxes
- ✓ 1. Long-form business notes
Sandisk is a NAND flash maker that sells SSDs, embedded flash, removable cards and wafers into three end markets (renamed Datacenter/Edge/Consumer in the FY2026 10-K from Cloud/Client/Consumer in the FY2025 10-K), getting all of its flash memory wafers from the Kioxia Flash Ventures joint ventures in which it holds 49.9%. It became a standalone Nasdaq-listed company on February 21, 2025, having previously been wholly owned by Western Digital. The P&L inflected hard in FY2026 (ended 2026-07-03): revenue $20.25B versus $7.36B in FY2025, operating income $12.39B versus -$1.38B, operating cash flow $11.67B, on capex of only $177M. The three prior years were operating losses, so FY2026 is the first year the reported profit is an operating result rather than a one-off driven number.
- ✓ 2. Competitive advantage
Sandisk competes in NAND flash against far larger vertically integrated suppliers (Kioxia, Micron, Samsung, SK Hynix, YMTC) on price, technology transitions and cost, and its own margin record shows no durable pricing power: operating income was -$2.04B in FY2023, -$468.0M in FY2024 and -$1.38B in FY2025 before jumping to +$12.39B in FY2026 on revenue of $20.25B. The claimed advantages — premium consumer brand, flash portfolio, cost-efficiency leadership, ~8,000 granted patents and NBM long-term agreements — are management assertions, and the 10-K itself says the patents 'cannot alone ensure our future success'. What the numbers support is scale and cycle leverage, not a moat that protects margins through a downturn.
- ✓ 3. 10-Q takeaways
Quarter ended October 2, 2026 was an operating surge: net revenue was $11,031 million, up 378% year over year, gross margin was 85.0%, and operating income was $8,780 million. Net income of $8,101 million included a $513 million Nanya equity-securities gain, which is separate from operating earnings. Operating cash flow was $6,363 million and the company repurchased $5.0 billion of stock; inventory days rose to 166 from 115 on builds to meet demand. Management expects AI-driven demand through calendar 2027 and beyond and higher FY2027 capex, while flagging pending U.S. tariff actions.
- ✓ 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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