Sandisk Corporation (SNDK) Up 23.6% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Sandisk Corporation (SNDK). Shares have added about 23.6% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Sandisk Corporation due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Sandisk Corporation before we dive into how investors and analysts have reacted as of late.

SNDK Q4 Earnings Beat Estimates, Revenues Rise on Datacenter Growth

Sandisk reported fourth-quarter fiscal 2026 non-GAAP earnings of $39.25 per share that beat the Zacks Consensus Estimate by 14.63% and jumped 68% sequentially. The company reported earnings of 29 cents per share in the year-ago quarter. 

Revenues surged 371.6% year over year to $8.97 billion and beat the consensus mark by 8%. Sequentially, revenues surged 51%. Stronger pricing, higher volumes and rapid Datacenter growth drove the upside, with Datacenter revenues hitting $2.98 billion in the reported quarter.

SNDK’s Revenue Growth Reflects Pricing Strength

Sandisk said roughly one-third of the sequential increase came from higher volumes, while two-thirds came from higher pricing. The mix shift toward higher-value customers also supported the company’s revenue expansion. The top line also exceeded management’s prior guidance range of $7.75-$8.25 billion. 

Datacenter revenues surged 103% sequentially. Growth reflected broader adoption of compute-focused TLC enterprise solid-state drives across hyperscale and AI infrastructure customers. Sandisk also began revenue shipments of its QLC Stargate platform, expanding its portfolio for high-capacity AI data lakes. 

Edge revenues were $5.43 billion, up 48% sequentially and 392% year over year. Management highlighted demand shifting toward AI-enabled devices and premium configurations, which support higher storage content in smartphones and PCs. Consumer revenues fell 32% sequentially and 5% year over year to $556 million.

SNDK’s New Business Models Improve Visibility

Sandisk has signed new business model agreements with eight Datacenter and Edge customers. These contracts have a weighted average duration of more than four years and include fixed and variable pricing elements with floors and ceilings.

The agreements represent minimum contracted revenues of $93.9 billion at floor pricing. Remaining performance obligations were $59.8 billion at quarter-end and would have been $91.1 billion including two agreements signed afterward. Financial guarantees totaled $16.5 billion. Sandisk expects the contracts to cover more than half of fiscal 2027 bits and roughly two-thirds of fiscal 2028 bits.

Sandisk’s Margins Expand on Operating Leverage

Non-GAAP gross margin expanded to 84.6% from 78.4% in the previous quarter and 26.4% reported in the year-ago quarter. The result exceeded management’s 79-81% guidance range.

Non-GAAP operating expenses were $484 million, representing 5.4% of revenues, compared with 7.5% in the previous quarter. Year over year, operating expenses increased 20%.

Non-GAAP operating margin rose to 79.2% from 70.9%, reflecting strong revenue growth and cost leverage.

Sandisk’s Cash Flow Supports Larger Buybacks

Sandisk ended the quarter with $4.76 billion in cash and cash equivalents after repurchasing 2.836 million shares for $4.5 billion. The board authorized an additional $14 billion repurchase program, lifting remaining authorization to $15.5 billion.

Cash flow from operations was $7.13 billion. Adjusted free cash flow totaled $5.04 billion, excluding $1.94 billion of customer prepayments and deposits related to the new business models. Gross capital expenditures were $562 million, or 6.3% of revenues.

SNDK’s Q1 Outlook Calls for Further Growth

For the first quarter of fiscal 2027, Sandisk expects revenues of $10.3-$10.8 billion. Sequential growth is projected to come from both bit growth and modest price increases.

Non-GAAP gross margin is expected between 83% and 85%, with operating expenses of $520-$540 million. Non-GAAP earnings are expected at $44-$46 per share. 

Sandisk expects fiscal 2027 sellable bit growth in the mid-teens as it carries higher inventory to support customer commitments.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 11.17% due to these changes.

VGM Scores

At this time, Sandisk Corporation has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sandisk Corporation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Sandisk Corporation belongs to the Zacks Computer- Storage Devices industry. Another stock from the same industry, Teradata (TDC), has gained 6.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Teradata reported revenues of $410 million in the last reported quarter, representing a year-over-year change of +0.5%. EPS of $0.69 for the same period compares with $0.47 a year ago.

Teradata is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -19.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +6.9%.

Teradata has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.

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This article originally published on Zacks Investment Research (zacks.com).

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