Is Sandisk stock a buy after Q1 FY2027 earnings?

SELL: Sandisk is worth $887.83, below the $1,126.52 price, even after a Q1 beat.

Sandisk · Q1 FY2027 · Published Nov 5, 2026 · Data cut-off: 2026-11-04 · By DeepCell AI · Sources

1 · Cover

SELL: Sandisk is worth $887.83, 21% below the $1,126.52 price, even after a Q1 beat

The beat raised the value but did not close the gap. We would buy at $739.86 or below and sell above $986.48.

SELL
Base value per share $887.83 up from $858.38 before results
Price, 3 November close $1,126.52 $1,238.03 before results
Value if pricing extends $1,409.71 above the $1,351.82 a BUY needs
Average analyst target $2,024 above every case we model
The beat was volume more than price.

Management put about 60% of the growth on volume. That implies price rose about 9%, against our 14%.

Margin is at a peak.

Gross margin of 85.1% compares with 7.1% in FY2023. We have price per gigabyte turning down from FY2029.

Cheap only on peak earnings.

4.8x FY2027E earnings looks low, but model EPS falls from $236 to $167 by FY2030E.

All per-share figures are pre-split. The 8-for-1 split takes effect on 19 November 2026. On the post-split basis the value is $110.98 and the price $140.82.

Source: Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026) · The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026) · stockanalysis.com — SNDK daily price history (close 3 November 2026) · stockanalysis.com — SNDK analyst forecast (S&P Global, 25 analysts)

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2 · Our view

Q1 beat the guide and consensus: revenue of $11,031M and EPS of $49.51

Revenue came in above the $10,800M top of the range and our $10,731M, and EPS above our $47.02.

Exhibit 1: Revenue by quarter, H2 FY2026 to FY2027 (USD millions)

USD millions; reported in dark blue, modeled quarters in grey

Revenue · Q3 FY2026A: $5,950Revenue · Q4 FY2026A: $8,965Revenue · Q1 FY2027: $11,031Revenue · Q2 FY2027E: $12,498Revenue · Q3 FY2027E: $13,259Revenue · Q4 FY2027E: $13,657Q3 FY2026AQ4 FY2026AQ1 FY2027Q2 FY2027EQ3 FY2027EQ4 FY2027E$0$5,000$10,000$16,000$8,965$11,031$13,657Quarters still open

Exhibit 2: Q1 FY2027: reported against expectations

The guide, consensus, our forecast before results, and the reported figure

Q1 FY2027 · Company guidanceQ1 FY2027 · ConsensusQ1 FY2027 · Our forecastQ1 FY2027 · Actual
Revenue$M10,550.010,650.010,731.111,031.0
Gross margin (non-GAAP)%84.0%84.6%85.1%
Operating expenses (non-GAAP)$M530.0530.0513.0
Diluted EPS (non-GAAP)$45.0046.2047.0249.51

The Q2 guide is $12,200M to $12,600M. Its $12,400M midpoint is above the $12,158M we had before results and below the $12,500M we said would support pricing extending.

Source: Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026) · TradingView News — SNDK Q1'27 earnings: revenue estimate is 10.65B USD

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3 · Q1 results

Revenue is bits times price: price did the work in FY2026, volume did more in Q1

FY2026 revenue rose 175% to $20,248M; FY2023, the last downturn, ended at $6,086M and a 7.1% gross margin.

Exhibit 3: Revenue by end market, FY2026 to Q1 FY2027 (USD millions)

USD millions; totals above each column; the arrow is the Q1 step

Datacenter · Q1 FY2026A: $269Datacenter · Q2 FY2026A: $440Datacenter · Q3 FY2026A: $1,467Datacenter · Q4 FY2026A: $2,977Datacenter · Q1 FY2027: $4,802Edge · Q1 FY2026A: $1,387Edge · Q2 FY2026A: $1,678Edge · Q3 FY2026A: $3,663Edge · Q4 FY2026A: $5,432Edge · Q1 FY2027: $5,832Consumer · Q1 FY2026A: $652Consumer · Q2 FY2026A: $907Consumer · Q3 FY2026A: $820Consumer · Q4 FY2026A: $556Consumer · Q1 FY2027: $397Q1 FY2026AQ2 FY2026AQ3 FY2026AQ4 FY2026AQ1 FY2027$0$2,500$5,000$7,500$10,000$12,500$2,308$3,025$5,950$8,965$11,031Q1 step: $2,066DatacenterEdgeConsumer
Datacenter, Q1 FY2027 $4,802M up 61% on Q4, the fastest-growing end market
Gross margin, Q1 FY2027 85.0% from 84.6% in Q4

Datacenter carried the step; Edge added to it and Consumer fell to $397M.

Source: Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026) · The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026) · Sandisk Corporation Form 10-K (fiscal year ended 2026-07-03, filed 2026-08-17) — Consolidated Statements of Operations · Sandisk (The Flash Business of Western Digital Corporation) Form 10 information statement, Exhibit 99.1 to Form 10-12B/A filed 2025-01-27 — carve-out combined financial statements — Combined Statements of Operations

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4 · Bits times price

Price per gigabyte holds through FY2028, then falls back, and revenue falls with it

Bits grow every year; the base case lets price turn across FY2029 and FY2030 rather than assume the peak is permanent.

Exhibit 4: Revenue by end market, FY2022A to FY2032E (USD millions)

USD millions; FY2022A to FY2024A carve-out; totals at the trough, the last actual, the peak and the end

Datacenter · FY2022A: $1,264Datacenter · FY2023A: $500Datacenter · FY2024A: $325Datacenter · FY2025A: $960Datacenter · FY2026A: $5,153Datacenter · FY2027E: $20,178Datacenter · FY2028E: $24,365Datacenter · FY2029E: $18,313Datacenter · FY2030E: $13,418Datacenter · FY2031E: $11,031Datacenter · FY2032E: $10,571Edge · FY2022A: $6,038Edge · FY2023A: $3,637Edge · FY2024A: $4,069Edge · FY2025A: $4,127Edge · FY2026A: $12,160Edge · FY2027E: $27,493Edge · FY2028E: $30,746Edge · FY2029E: $20,348Edge · FY2030E: $13,703Edge · FY2031E: $10,801Edge · FY2032E: $9,514Consumer · FY2022A: $2,452Consumer · FY2023A: $1,949Consumer · FY2024A: $2,269Consumer · FY2025A: $2,268Consumer · FY2026A: $2,935Consumer · FY2027E: $2,774Consumer · FY2028E: $2,901Consumer · FY2029E: $2,035Consumer · FY2030E: $1,427Consumer · FY2031E: $1,149Consumer · FY2032E: $1,057FY2022AFY2023AFY2024AFY2025AFY2026AFY2027EFY2028EFY2029EFY2030EFY2031EFY2032E$0$20,000$40,000$60,000$6,086$20,248$58,012$21,143Our forecastDatacenterEdgeConsumer

NBMs put a floor under part of the cycle. They carry $93,900M of minimum revenue and about half of FY2027 bits. Other volume still prices at market: gross margin is 71% in FY2030E, partway through the fall.

Source: The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026) · Sandisk Q4 fiscal 2026 earnings call transcript, 2026-08-05 (The Motley Fool) · Sandisk Corporation Form 10-K (fiscal year ended 2026-07-03, filed 2026-08-17) — Consolidated Statements of Operations

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5 · End markets

Cash is real, and Q1 relied less on customer payments

Q1 operating cash flow was $6,363M; adjusted free cash flow, which removes NBM payments, was $5,696M.

Exhibit 5: Operating cash flow and the NBM payments inside it, FY2026 to Q1 FY2027

USD millions, FY2026 to Q1 FY2027; operating cash flow above each column

Cash from operations before NBM prepayments and deposits · Q1 FY2026A: $488Cash from operations before NBM prepayments and deposits · Q2 FY2026A: $1,019Cash from operations before NBM prepayments and deposits · Q3 FY2026A: $2,500Cash from operations before NBM prepayments and deposits · Q4 FY2026A: $5,188Cash from operations before NBM prepayments and deposits · Q1 FY2027: $5,898NBM prepayments and deposits received · Q3 FY2026A: $538NBM prepayments and deposits received · Q4 FY2026A: $1,938NBM prepayments and deposits received · Q1 FY2027: $465Q1 FY2026AQ2 FY2026AQ3 FY2026AQ4 FY2026AQ1 FY2027$0$2,500$5,000$8,000$488$1,019$3,038$7,126$6,363$5,188$5,898$1,938Cash from operations before NBM prepayments and depositsNBM prepayments and deposits received
NBM payments in Q1 operating cash flow 7% from 21% across FY2026

Sandisk spent $5,000M on buybacks in Q1 and ended with $5,136M of cash and no debt. Security deposits of $1,500M are deducted in the equity bridge.

Source: Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026) · The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026) · Sandisk Corporation Form 10-K (fiscal year ended 2026-07-03, filed 2026-08-17) — remaining performance obligations, refund liabilities, Nanya shares, Flash Ventures guarantees and material cash requirements

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6 · Earnings quality

What the shares are worth, and how far apart the forward cases are

7 · What the shares are worth

The base DCF is worth $887.83 against a $1,126.52 price; forward cases run from $430.21 to $1,409.71

Only pricing extending clears the price, and the Q2 guide does not yet point there.

Exhibit 6: Value per share by case against the price (USD)

USD per share, pre-split; base on WACC 14.3% and terminal growth 3.0%; the markers are the base value and the downturn

Low · DCF: Gordon growth to exit multiple: $888Point value · DCF: Gordon growth to exit multiple: $888Low · Forward cases: stalls to extends: $579Point value · Forward cases: stalls to extends: $888Low · Structural downside: downturn to stalls: $430Point value · Structural downside: downturn to stalls: $430DCF: Gordon growth to exit multipleForward cases: stalls to extendsStructural downside: downturn to stalls$250$500$750$1,000$1,250$1,500$888–$957$579–$1,410$430–$579Price: $1,127BUY needs: $1,352SELL below: $1,014

The guide sits with the base case. Our Q2 revenue is $12,498M in the base, $13,066M if pricing extends and $11,589M if it stalls, against a guide of $12,200M to $12,600M. The exit multiple gives $956.84.

Source: stockanalysis.com — SNDK daily price history (close 3 November 2026) · Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026)

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8 · Valuation

Net cash and the Nanya shares add to value; customer deposits come off

Prepayments unwind as delivered revenue and stay in; the Flash Ventures guarantee is paid through cost of revenue.

Exhibit 7: Enterprise value to equity value (USD millions)

USD millions, Gordon growth, base case; the axis is broken below enterprise value so the bridge steps can be read

Enterprise value (Gordon growth): $132,575Enterprise value (Gordon growth): $132,575Net cash (cash less debt): $4,762Nanya shares (marketable, locked up): $1,777Less customer security deposits (refundable): -$1,500Equity value (Gordon growth): $137,614Equity value (Gordon growth): $137,614Enterprise value (Gordongrowth)Net cash (cash less debt)Nanya shares (marketable,locked up)Less customer securitydeposits (refundable)Equity value (Gordongrowth)$132,575$4,762$1,777-$1,500$137,614

The bridge is small next to the cycle. It stays on the 3 July balance sheet and pre-split diluted shares, because the cash flows include Q1. FY2027E EPS of $236 falls to $167 in FY2030E.

Source: Sandisk Corporation Form 10-K (fiscal year ended 2026-07-03, filed 2026-08-17) — remaining performance obligations, refund liabilities, Nanya shares, Flash Ventures guarantees and material cash requirements

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9 · Equity bridge

What would change the rating from here

A lower price or pricing that outruns the Q2 guide moves the rating. A base-case year does not.

If we see Value per share Rating
Shares at $739.86 or below The base, 20% above the price BUY
Shares above $986.48 The base, more than 10% below the price SELL
Pricing extends: another price step in Q2, and the peak a year later $1,409.71 BUY at this price, which needs $1,351.82
Pricing stalls: Q2 flat on price, and the peak already passed $579.30 SELL
NAND price downturn: supply additions turn price down in FY2027 $430.21 SELL

SELL. After the split, divide by 8: BUY at $92.48 or below and SELL above $123.31, against a value of $110.98.

Source: values from the forward cases and the rating rule · Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026)

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10 · What would change the rating

A NAND price downturn takes value to $430.21: the cycle has done it before

Management says pricing should keep rising modestly through the year; a supply response is what would end it.

Exhibit 8: Gross margin by fiscal year, FY2022A to FY2032E

GAAP; FY2022A to FY2024A carve-out; the base case from FY2027E

Gross margin (GAAP) · FY2023A: 7%Gross margin (GAAP) · FY2024A: 16%Gross margin (GAAP) · FY2025A: 30%Gross margin (GAAP) · FY2026A: 71%Gross margin (GAAP) · FY2027E: 86%Gross margin (GAAP) · FY2028E: 87%Gross margin (GAAP) · FY2029E: 80%Gross margin (GAAP) · FY2030E: 71%Gross margin (GAAP) · FY2031E: 61%Gross margin (GAAP) · FY2032E: 55%0%25%50%75%100%FY2022AFY2023AFY2024AFY2025AFY2026AFY2027EFY2028EFY2029EFY2030EFY2031EFY2032E7%87%55%Our forecastGross margin (GAAP) · FY2022A: 33%Gross margin (GAAP) · FY2023A: 7%Gross margin (GAAP) · FY2024A: 16%Gross margin (GAAP) · FY2025A: 30%Gross margin (GAAP) · FY2026A: 71%Gross margin (GAAP) · FY2027E: 86%Gross margin (GAAP) · FY2028E: 87%Gross margin (GAAP) · FY2029E: 80%Gross margin (GAAP) · FY2030E: 71%Gross margin (GAAP) · FY2031E: 61%Gross margin (GAAP) · FY2032E: 55%
Value per share in the downturn $430.21 the structural downside, a bound rather than a forecast

The trigger is supply, not demand. Management said it has no plan to change its bit growth of mid to high teens, so this has not started.

Source: The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026) · Sandisk (The Flash Business of Western Digital Corporation) Form 10 information statement, Exhibit 99.1 to Form 10-12B/A filed 2025-01-27 — carve-out combined financial statements — Combined Statements of Operations

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11 · The structural downside

What we said and what happened: SELL stood, and our forecast was too low

Before results we said only a quarter and a guide that both extended pricing would lift the rating to HOLD. The quarter did. The guide midpoint fell short.

We said SELL before results.

The base value then sat well below the $1,238.03 price, and the shares have since fallen to $1,126.52.

Value before results $858.38 on revenue of $10,731M
Revenue beat our forecast.

We had bits up 5% and price up 14%. Volume did more and price less, and revenue beat us.

Value now $887.83 on revenue of $11,031M
The next test is Q2.

Management guided EPS of $55.00 to $57.00, pre-split. Our $56.23 sits inside that, but our 86.0% gross margin is above the 85.0% midpoint of the guide.

Source: Sandisk Reports Fiscal First Quarter 2027 Financial Results (29 October 2026) · The Motley Fool — SanDisk (SNDK) Q1 2027 earnings call transcript (30 October 2026)

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12 · What we said and what happened

Sources

Not investment advice. Any rating here is this model's view of value against price at the data cut-off.

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