Two Wall Street Analysts Just Set Price Targets on Sandisk $1,430 Apart. One of Them Is Going to Be Very Wrong.

Wall Street tin usually hold connected a banal to wrong a fewer percent points. On representation shaper Sandisk (NASDAQ: SNDK), it can't travel wrong $1,430 -- astatine slightest that is the lawsuit for 2 analysts.

This week, Susquehanna trimmed its terms people connected the banal to $3,050 from a anterior $3,250 and kept its affirmative rating. Wells Fargo went the different way, raising its people to $1,620 from $1,250 -- and inactive declined to urge buying the shares.

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With the banal astir $1,600 arsenic of this writing, 1 steadfast is saying Sandisk could astir treble wrong a year. The different is saying today's terms is already conscionable astir right. They can't some beryllium right, and the spread betwixt them maps the full statement implicit arguably the hottest banal of the past year.

That vigor is worthy restating. Sandisk's 52-week scope runs from $40.10 to $2,354.39. At its peak, the banal had traded arsenic overmuch arsenic 58 times higher than its low. Nothing astir a determination similar that is normal, and neither is the disagreement it near behind.

What the $3,050 broadside believes

Susquehanna's lawsuit rests connected the thought that this representation rhythm is different. NAND flash representation (the retention chips Sandisk makes for phones, PCs, and information centers) has historically been a brutal boom-and-bust business.

The bulls reason that the AI (artificial intelligence) build-out has changed the request broadside of that equation. AI inferencing workloads are consuming much storage, suppliers person stayed disciplined astir adding capacity, and connected this view, proviso stays choky done 2027 portion today's bonzer pricing holds.

Sandisk's caller results springiness the bulls plentifulness to enactment with. Fiscal third-quarter gross roseate 251% twelvemonth implicit twelvemonth to $5.95 billion, with non-GAAP (adjusted) gross borderline reaching 78.4% -- figures astir unheard of successful the representation industry. The institution has besides signed 5 multi-year proviso agreements, the archetypal 3 of which unsocial transportation astir $42 cardinal successful minimum contractual revenue, a operation designed to creaseless precisely the benignant of bust the bears fear. And absorption guided for $30 to $33 successful fiscal fourth-quarter adjusted net per share, connected gross of $7.75 cardinal to $8.25 billion.

Annualize the midpoint of that guidance, and you get astir $126 successful net per share. Against net powerfulness similar that, $3,050 works retired to astir 24 times earnings. That's a premium, but not a fantasy, if the pricing holds.