Sandisk Corp (SNDK)

Conclusion

Sandisk Corp designs, manufactures and sells NAND flash data storage products, from solid state drives for PCs and gaming consoles to embedded storage for phones, cars and datacenters. On 2026-11-09 the share price was 886.51 USD, giving a market capitalisation of 126.14 billion USD and an enterprise value of 121.21 billion USD.

The verdict is undervalued. Today's P/E is 6.5x, EV/EBITDA is 5.6x and the free cash flow yield is 13.8%. The data does not include the ten-year median multiples, so these cannot be set against the company's own history. The DCF gives 4309.61 USD per share at a discount rate of 9.9%, and the fair value band runs from 3447.69 to 5171.54 USD, with a margin of safety of 386.1% at the current price. The reverse DCF implies growth of -6.4% a year, while revenue has grown at a compound rate of 49.3% over three years.

What holds the case up: net debt to EBITDA of -0.23, meaning net cash; ROIC of 144.2% against a WACC of 9.9%; and a gross margin of 80.0%. What would break it: earnings quality, which is grey for lack of data; the share price, which has fallen from 2273.73 USD on 2026-06-30 to 886.51 USD; and the DCF, where the terminal value accounts for 58.9% of the result. The historical operating margin median is -7.0%, against 72.5% today.

Financial health

Financial strength is green: the current ratio, net debt to EBITDA, interest coverage and the Altman Z-score are all assessed good. The current ratio is 2.58 and the quick ratio 1.98. Net debt to EBITDA of -0.23 means the company holds more cash than debt, debt to equity is 0.0111, and interest coverage is 461.2x. The Altman Z-score is 15.18, in the safe zone. The model was designed for manufacturers, and Sandisk manufactures storage products, so the reading applies. Insolvency risk: low, about 0.0% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is grey because the data needed for a full assessment is incomplete: the Piotroski score is 6 out of the 8 criteria that could be evaluated, and the Beneish M-score is not available. Free cash flow conversion is 89.4% on a trailing basis and 133.2% over five years, which is assessed good. The accrual ratio is -1.3%, and stock-based compensation is 0.9% of revenue, leaving free cash flow after it of 17.10 billion USD. The five-year change in share count is not available. Earnings beat expectations in 6 of the last 8 quarters, with one miss and an average surprise of 150.1%. Estimate revisions are upward: the current year by 7.0% over 90 days and the next year by 11.8%.

Profitability

Profitability is green. Margins sit well above their historical medians: gross margin 80.0% against 30.1%, operating margin 72.5% against -7.0%, and net margin 67.0% against -10.1%. Margin stability is 11.46. ROIC is 144.2% against a WACC of 9.9%, and the given ROIC minus WACC figure is 134.4%. The five-year median ROIC is -3.5%, so the recent level is far above the company's past. The DuPont split for the year to June 2026 shows a net margin of 56.5%, an asset turnover of 0.90 and an equity multiplier of 1.43. Return on equity of 107.1% is therefore driven mainly by margin, not leverage.

Growth

Growth is green. Revenue has a compound annual growth rate of 49.3% over three years. Revenue grew in 3 of the 4 comparable years. The three-year compound rate for earnings per share, and the five- and ten-year rates for revenue and earnings, are not available. The next-year earnings estimate points to growth of 27.1%, which is a forecast rather than a delivered result.

Valuation

Valuation is green. Current multiples are a P/E of 6.5x, EV/EBITDA of 5.6x, price to free cash flow of 7.3x, price to sales of 4.4x and price to book of 7.0x. The historical medians needed for a premium or discount are not in the data. The DCF gives 4309.61 USD per share, using 20% growth in the first stage, 2.5% terminal growth and a discount rate of 9.9%. The terminal value makes up 58.9% of this. The reverse DCF implies growth of -6.4%. The fair value band is 3447.69 to 5171.54 USD, with a midpoint of 4309.61 USD. This is an order-of-magnitude estimate built on fixed assumptions, not a price target. Beta is not available. The company pays no dividend.

Risks

The largest risk is in earnings quality, which cannot be fully assessed. Free cash flow conversion has fallen from 133.2% over five years to 89.4% on a trailing basis. The DCF depends heavily on its terminal value, which accounts for 58.9% of the result, so small changes in the long-term assumptions would move it substantially. The share price has been volatile: it stood at 2273.73 USD on 2026-06-30 and at 886.51 USD on 2026-11-09. The historical margin medians are negative, so the current margins may not last. The share count trend, beta and the ten-year medians are not available. This analysis has no debt maturity schedule and no revenue by segment.