Key Takeaways
- Shares of SanDisk tumbled more than 9% in early trading despite surpassing Q4 profit and revenue projections
- Fourth-quarter revenue reached $8.97 billion, representing a 372% year-over-year increase, while EPS of $39.25 exceeded the $34.96 forecast
- First-quarter revenue outlook of $10.3B to $10.8B fell short of the $10.82B analyst consensus
- Projected gross margins of 83%-85% also underwhelmed compared to the 84.6% achieved in Q4
- With shares up more than 390% year to date, investor expectations were exceptionally elevated
SanDisk delivered impressive quarterly results that would typically spark celebration. The financials told a compelling story. However, investors were more concerned about future prospects, and that’s where the company stumbled.
Shares traded near $1,223 during Thursday’s premarket session, representing a 9.4% decline, though losses moderated to 5.4% after the opening bell.
Fourth-quarter adjusted earnings per share reached $39.25, significantly exceeding analyst predictions of $34.96. Revenue totaling $8.97 billion topped the $8.48 billion projection. In the same period last year, SanDisk reported just 29 cents per share on $1.9 billion in sales. The transformation has been extraordinary.
Forward Outlook Falls Short
Looking ahead to Q1, SanDisk projected revenue between $10.3 billion and $10.8 billion. Wall Street anticipated $10.82 billion. The guidance midpoint undershot expectations.
Margin forecasts also underwhelmed investors. Management predicted gross margins of 83% to 85% for the coming quarter, trailing the 84.6% recorded in Q4.
The company’s adjusted EPS outlook of $44.00 to $46.00 aligned closely with the $44.21 consensus estimate, providing no meaningful upside catalyst.
Vital Knowledge analysts captured the sentiment concisely: “Numbers on an absolute basis are spectacular, but the shortfall on guidance is negative.”
Data center sales for the fourth quarter reached $2.98 billion, more than doubling from the previous quarter and surpassing the $2.74 billion estimate. Edge segment revenue increased 48% to $5.43 billion. Consumer division sales declined 32% sequentially to $556 million.
For fiscal year 2026, total revenue surged 175% year-over-year to $20.25 billion. Annual data center revenue jumped 437%, fueled by robust AI infrastructure demand.
Shareholder Returns and Strategic Partnerships
SanDisk’s board authorized an additional $14 billion for share repurchases, increasing total remaining authorization to $15.5 billion.
Management also disclosed five new New Business Model partnerships secured since the April earnings release, totaling ten agreements since that announcement.
CEO David Goeckeler addressed the volatility in current market conditions. “We want to get this kind of boom and bust out of it,” he explained during the earnings call. “We want to get more consistent and deeper relationships with our customers so we can plan better and they can plan better.”
Shares have climbed over 469% in 2026 and surged more than 3,100% over the trailing twelve months. Such extraordinary gains create demanding expectations.
When a stock trades at premium valuations, meeting expectations isn’t sufficient. SanDisk’s buyback authorization now totals $15.5 billion following the latest board approval.
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