Western Digital (WDC), a dominant force in storage media, has officially completed its long-anticipated corporate split. The strategic move has given rise to two independent entities, each poised to carve its path in the ever-evolving tech landscape. Western Digital, the stalwart of hard drive technology, retains its name and continues trading under the familiar WDC ticker, reinforcing its legacy in data storage. Meanwhile, the flash memory and SSD division now operates as SanDisk (SNDK), stepping into the spotlight as an advanced memory technology leader.
The separation, finalized on Feb. 24, has not altered WDC’s position in the S&P 500 Index ($SPX), reflecting its sustained industry relevance. SNDK, however, secured a fresh opportunity, joining the S&P Smallcap 600 ($IQY) on Feb. 25, replacing Leslie’s (LESL), whose market cap no longer aligns with the small-cap space. With NAND technology at its core, SanDisk is positioned for expansion in high-growth markets. As the demand for flash memory surges, let us see whether SNDK stands out as a wise investment choice right now.
About SanDisk Stock
SanDisk (SNDK), based in Milpitas, California, develops and manufactures data storage solutions. With a market cap of roughly $6.2 billion, it provides solid-state drives for desktops, notebooks, gaming consoles, and set-top boxes. Its flash-based storage supports mobile devices, automotive systems, Internet of Things (IoT), industrial applications, and data centers, along with removable cards and USB drives.
SNDK has seen significant momentum. Over the past month, it soared 8%, while the broader S&P Smallcap 600 Index ($IQY) recorded a 4% loss.
SNDK trades at 27.42 times forward earnings, surpassing the sector average of 21.79x.
A Closer Look at SanDisk’s Latest Financials
On March 7, SanDisk filed its first 10-Q report since spinning off from Western Digital last month. For the quarter that ended on Dec. 27, 2024, net revenue rose 12.7% year-over-year to $1.9 billion, driven by improved pricing and a stronger product mix. Gross profit surged to $606 million, reflecting a stunning 276.4% jump from $161 million in the prior year, benefiting from higher average selling prices and a more favorable product mix.
Operating income reached $195 million, reversing an operating loss of $245 million in the previous year’s quarter. Net income followed a similar trajectory, swinging from a $301 million net loss to a $104 million profit during the quarter. Cash flow metrics highlight the company's financial shifts. Operating activities used $36 million in cash, while investing and financing activities provided $169 million and $344 million, respectively.
Moreover, SanDisk, in an investor presentation earlier this year, highlighted its strong position in the SSD market, holding a 25% share across performance, mainstream, and value SSDs. Its flash storage solutions also cater to artificial intelligence (AI)-driven data centers and automotive businesses, strengthening its presence in high-demand sectors.
What Do Analysts Expect for SanDisk Stock?
Recently, Morgan Stanley initiated bullish coverage on SNDK with an “Overweight” rating and an $84 price target. Analyst Joseph Moore highlighted SanDisk’s 14% share of the global NAND market in 2024, which rises to 30% when factoring in its joint venture with Kioxia, a manufacturer of flash memory.
Moore also noted that while the NAND market has recovered from its 2024 lows, rising utilization has caused a slight oversupply. Even though the investment firm expects challenges in the NAND market in early 2025, it projects 90% upside within a year. Thus, calling SNDK “the best risk/rewards in our coverage,” Moore remains highly optimistic despite short-term uncertainty.
While analyst coverage is limited, Wall Street maintains a somewhat optimistic outlook, with a consensus rating of "Moderate Buy” overall. Out of seven analysts offering recommendations for SanDisk, three rate it as a “Strong Buy,” while four suggest a “Hold.” SNDK’s average analyst price target of $62 represents potential upside of 20%, while Morgan Stanley’s Street-high target of $84 suggests that the stock can climb as much as 61% from here.
