Sandisk (NASDAQ:SNDK) Shares Gap Up – Here’s Why

Sandisk Corporation (NASDAQ:SNDK)’s share price gapped up prior to trading on Friday. The stock had previously closed at $806.43, but opened at $898.27. Sandisk shares last traded at $862.8480, with a volume of 4,769,830 shares traded.

Key Stories Impacting Sandisk

Here are the key news stories impacting Sandisk this week:

• Positive Sentiment: Shares are recovering alongside other memory stocks after Thursday’s steep decline. The bounce may reflect dip-buying and the view among some investors that the selloff has become excessive, though it does not by itself confirm a lasting reversal. SanDisk Surges Following Post-Midterm Crash
• Positive Sentiment: Recent fundamentals provide support: SanDisk beat quarterly earnings expectations and raised its current-quarter outlook. Long-term supply agreements and strong data-center demand may also help provide revenue visibility if AI-related demand holds. SanDisk financial and earnings information SanDisk RPO and supply agreements
• Negative Sentiment: The selloff reflected concern that election results could bring tighter AI regulation or delays to data-center projects, weakening expected chip demand. Reports of soft phone-chip sales and industry-wide memory dynamics have added to worries about demand and NAND pricing. SanDisk Leads Memory Stocks Lower Memory dynamics and chipmaker sales
• Negative Sentiment: China’s YMTC is expanding NAND production, raising a longer-term competitive risk for SanDisk. Separately, concerns that exceptionally high memory margins may be cyclical leave investors questioning whether current earnings can persist. YMTC expands NAND production

Analyst Upgrades and Downgrades

Several analysts have weighed in on the company. The Goldman Sachs Group reiterated a “buy” rating and issued a $2,200.00 price objective (up from $1,200.00) on shares of Sandisk in a research report on Thursday, August 13th. Royal Bank Of Canada cut their target price on shares of Sandisk from $1,600.00 to $1,400.00 and set a “sector perform” rating on the stock in a report on Friday, October 30th. Rosenblatt Securities reaffirmed a “buy” rating and issued a $2,400.00 target price on shares of Sandisk in a research note on Friday, October 30th. Wells Fargo & Company lowered their price target on shares of Sandisk from $1,550.00 to $1,300.00 and set an “equal weight” rating for the company in a report on Friday, October 30th. Finally, China Renaissance upped their price target on shares of Sandisk from $2,000.00 to $2,250.00 and gave the company a “buy” rating in a report on Wednesday, August 19th. One research analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat, Sandisk has a consensus rating of “Moderate Buy” and a consensus target price of $2,056.23.

Sandisk Price Performance

The company has a market capitalization of $120.62 billion, a P/E ratio of 6.84, a PEG ratio of 0.08 and a beta of 5.66. The company has a 50 day moving average of $1,517.43 and a 200-day moving average of $1,263.07.

Sandisk shares are set to split before the market opens on Friday, November 20th. The 8-1 split was announced on Thursday, October 29th. The newly issued shares will be distributed to shareholders after the market closes on Thursday, November 19th.

Sandisk (NASDAQ:SNDK) last released its quarterly earnings results on Thursday, October 29th. The data storage provider reported $49.51 EPS for the quarter, beating analysts’ consensus estimates of $46.19 by $3.32. Sandisk had a return on equity of 125.70% and a net margin of 67.04%. The business had revenue of $11.03 billion during the quarter. During the same period in the previous year, the company earned $1.22 EPS. The company’s revenue for the quarter was up 23.0% on a year-over-year basis. Research analysts predict that Sandisk Corporation will post 222.70 EPS for the current fiscal year.

Sandisk declared that its board has initiated a stock buyback plan on Wednesday, August 5th that allows the company to buy back $14 billion in shares. This buyback authorization allows the data storage provider to purchase up to 6.6% of its shares through open market purchases. Share buyback plans are generally a sign that the company’s board believes its stock is undervalued.

Insider Activity at Sandisk

In other Sandisk news, EVP Alper Ilkbahar sold 4,712 shares of the company’s stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $1,540.58, for a total value of $7,259,212.96. Following the completion of the transaction, the executive vice president directly owned 44,134 shares in the company, valued at approximately $67,991,957.72. This represents a 9.65% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Luis Visoso sold 1,000 shares of the stock in a transaction dated Tuesday, September 15th. The stock was sold at an average price of $1,568.83, for a total transaction of $1,568,830.00. Following the completion of the transaction, the chief financial officer directly owned 130,976 shares of the company’s stock, valued at approximately $205,479,078.08. The trade was a 0.76% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 77,899 shares of company stock valued at $121,156,782 in the last 90 days. 0.29% of the stock is owned by company insiders.

Hedge Funds Weigh In On Sandisk

Several large investors have recently made changes to their positions in SNDK. BlackRock Inc. purchased a new position in shares of Sandisk in the 2nd quarter worth about $23,408,732,000. Situational Awareness LP boosted its holdings in Sandisk by 42.4% in the second quarter. Situational Awareness LP now owns 2,495,344 shares of the data storage provider’s stock worth $5,673,739,000 after purchasing an additional 743,325 shares during the last quarter. Bank of New York Mellon Corp purchased a new position in shares of Sandisk in the 2nd quarter worth $1,621,353,000. Bank of America Corp DE bought a new stake in shares of Sandisk during the 2nd quarter valued at about $1,564,901,000. Finally, Assenagon Asset Management S.A. bought a new stake in Sandisk during the second quarter valued at approximately $1,413,917,000.

About Sandisk

SanDisk Corporation offers flash storage solutions. The Company designs, develops and manufactures data storage solutions in a range of form factors using flash memory, controller, firmware and software technologies. The Company operates through flash memory storage products segment. Its solutions include a range of solid state drives (SSD), embedded products, removable cards, universal serial bus (USB), drives, wireless media drives, digital media players, and wafers and components. It offers SSDs for client computing applications, which encompass desktop computers, notebook computers, tablets and other computing devices.