Mizuho's New Price Target#
Mizuho has raised its price target for SanDisk (NASDAQ:SNDK) from $1,000 to $1,220, while keeping an Outperform rating. Currently, SanDisk's stock trades at $1,096.51, close to its 52-week high of $1,115. The stock has seen a remarkable increase of 3,265% over the past year, although some analysts suggest it may be overvalued at this price.
Strong Quarterly Results#
SanDisk recently reported impressive results for the March quarter, forecasting a 35% increase in revenue for the June quarter, reaching $8 billion. This figure significantly exceeds the consensus estimate of $6.65 billion. Additionally, gross margins are expected to rise to 80%, up from the 74% consensus, indicating strong profitability. Six analysts have revised their earnings estimates upward, projecting the company will return to profitability this year with earnings of $44.72 per share, following a loss of $7.15 per share over the last year.
Pricing Trends and Supply Dynamics#
Mizuho noted that pricing remains robust due to tight supply conditions expected to last through 2026. The average selling prices for the June quarter are estimated to rise by about 22%. SanDisk's new business model shows a revenue performance obligation of $42 billion with three customers, with potential for growth as they add more clients and benefit from rising prices.
NAND Market Performance#
In the NAND market, spot prices have surged between 36% and 81% year-to-date, while contract prices increased by approximately 52% quarter-over-quarter in the June quarter. Data center revenue has also seen significant growth, accelerating by 230% quarter-over-quarter and 640% year-over-year, driven by new product launches.
Conclusion#
Mizuho has also raised its earnings per share estimates for fiscal years 2027 and 2028 by 20% and 39%, respectively, indicating confidence in SanDisk's future performance. The company continues to show strong financial results, reinforcing its position in the market.