Sandisk (NASDAQ:SNDK) Stock Falls 4.1% - Here's What Happened

Key Points

• Sandisk shares fell 4.1% to $937.46 Thursday, amid reports about Nvidia CEO Jensen Huang that unsettled the AI semiconductor supply chain and raised concerns about memory demand.
• Despite the selloff, Evercore reiterated its Outperform rating, citing durable NAND demand; analysts overall have a “Moderate Buy” consensus rating.
• Sandisk recently beat quarterly earnings expectations, reporting $49.51 per share and revenue up 23% year over year. Its planned 8-for-1 stock split changes the share count and price per share, not the value of investors’ holdings.

Sandisk Corporation (NASDAQ:SNDK - Get Free Report)'s stock price fell 4.1% on Thursday. The stock traded as low as $869.46 and last traded at $937.46. Approximately 12,871,342 shares traded hands during mid-day trading, a decline of 13% from the average daily volume of 14,808,693 shares. The stock had previously closed at $977.69.

Sandisk News Roundup

Here's some of the latest news about SNDK:

• Positive Sentiment: Evercore ISI reiterated its Outperform rating and $2,500 price target, arguing that investors may be underestimating structural changes in Sandisk’s business and the durability of NAND demand. The target is an analyst estimate, not a guarantee. Evercore defends Sandisk stock after selloff
• Neutral Sentiment: Sandisk’s planned 8-for-1 stock split changes the number of shares and per-share price, but not the underlying value of an investor’s stake. Will SanDisk’s planned stock split reverse its share decline?
• Negative Sentiment: Reports that Nvidia CEO Jensen Huang resigned unsettled the AI semiconductor supply chain and weighed on memory stocks. Investors may be concerned that disruption or weaker spending among AI-chip customers could slow demand for Sandisk’s products. Why Sandisk stock dropped on Thursday

Wall Street Analyst Weigh In

Several brokerages recently issued reports on SNDK. China Renaissance upped their price objective on shares of Sandisk from $2,000.00 to $2,250.00 and gave the company a "buy" rating in a research note on Wednesday, August 19th. New Street Research set a $3,000.00 target price on shares of Sandisk in a research note on Thursday, August 6th. Zacks Research upgraded Sandisk from a "hold" rating to a "strong-buy" rating in a report on Tuesday, October 13th. Bank of America restated a "buy" rating and set a $2,000.00 target price on shares of Sandisk in a report on Friday, October 30th. Finally, Evercore restated an "outperform" rating and issued a $3,100.00 price target (up from $1,400.00) on shares of Sandisk in a research report on Thursday, August 13th. One research analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $2,056.23.

Sandisk Stock Performance

The firm's 50-day moving average price is $1,467.15 and its two-hundred day moving average price is $1,271.20. The stock has a market cap of $133.39 billion, a price-to-earnings ratio of 7.51, a PEG ratio of 0.07 and a beta of 5.66.

Sandisk's stock is set to split on the morning of Friday, November 20th. The 8-1 split was announced on Thursday, October 29th. The newly minted shares will be issued to shareholders after the closing bell on Thursday, November 19th.

Sandisk (NASDAQ:SNDK - Get Free Report) last issued its earnings results on Thursday, October 29th. The data storage provider reported $49.51 EPS for the quarter, topping analysts' consensus estimates of $46.19 by $3.32. The company had revenue of $11.03 billion for the quarter. Sandisk had a net margin of 67.04% and a return on equity of 125.70%. Sandisk's revenue for the quarter was up 23.0% on a year-over-year basis. During the same period last year, the firm earned $1.22 earnings per share. As a group, sell-side analysts expect that Sandisk Corporation will post 226.01 earnings per share for the current fiscal year.

Sandisk announced that its Board of Directors has initiated a share buyback program on Wednesday, August 5th that permits the company to repurchase $14 billion in outstanding shares. This buyback authorization permits the data storage provider to repurchase up to 6.6% of its stock through open market purchases. Stock buyback programs are usually a sign that the company's board believes its stock is undervalued.

Insider Activity

In related news, CEO David Goeckeler sold 33,841 shares of the company's stock in a transaction that occurred on Thursday, September 17th. The stock was sold at an average price of $1,574.21, for a total value of $53,272,840.61. Following the transaction, the chief executive officer directly owned 382,865 shares in the company, valued at approximately $602,709,911.65. This represents a 8.12% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Luis Visoso sold 1,000 shares of the company's stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $1,568.83, for a total value of $1,568,830.00. Following the completion of the transaction, the chief financial officer owned 130,976 shares in the company, valued at $205,479,078.08. This represents 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 worth $121,156,782 in the last 90 days. 0.29% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Sandisk

A number of institutional investors and hedge funds have recently added to or reduced their stakes in SNDK. Meeder Advisory Services Inc. raised its holdings in Sandisk by 48.9% in the 3rd quarter. Meeder Advisory Services Inc. now owns 2,427 shares of the data storage provider's stock valued at $4,223,000 after buying an additional 797 shares during the period. CacheTech Inc. lifted its position in Sandisk by 17.3% in the third quarter. CacheTech Inc. now owns 1,805 shares of the data storage provider's stock valued at $3,141,000 after buying an additional 266 shares during the last quarter. Winslow Capital Management LLC boosted its stake in Sandisk by 5.4% during the third quarter. Winslow Capital Management LLC now owns 136,843 shares of the data storage provider's stock worth $238,092,000 after buying an additional 6,967 shares during the period. First Trust Advisors LP boosted its stake in Sandisk by 1.0% during the third quarter. First Trust Advisors LP now owns 183,805 shares of the data storage provider's stock worth $319,800,000 after buying an additional 1,800 shares during the period. Finally, Hexagon Capital Partners LLC increased its position in shares of Sandisk by 16.7% during the third quarter. Hexagon Capital Partners LLC now owns 307 shares of the data storage provider's stock valued at $534,000 after acquiring an additional 44 shares during the last quarter.

Sandisk Company Profile

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.

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