Why Sandisk Stock Popped Today
Key Points
Bernstein SocGen Group analyst Mark C. Newman raised his price target on Sandisk this morning.
NAND prices are skyrocketing, and could turn Sandisk very profitable in a hurry.
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Sandisk (NASDAQ: SNDK) stock jumped 6.3% through 11:55 a.m. ET Thursday after Bernstein SocGen Group analyst Mark C. Newman raised his price target on the semiconductor stock by 25%, to $1,250 per share, as StreetInsider.com reports today.
Sandisk shares are already up 2,040% over the past 52 weeks -- but Bernstein thinks this run is not done.
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What Bernstein says about Sandisk
Indeed, to hear Newman tell it, $1,250 may be a conservative estimate. In what the analyst calls a "blue-sky scenario," it's conceivable Sandisk could rise as high as $3,000 if NAND computer memory chip prices continue to soar.
Sandisk's upcoming fiscal Q3 2026 earnings report, due out April 30, will give us a better picture of how likely this is to happen. But for the time being, Newman observes that NAND prices in March were already up more than anticipated. Looking ahead into fiscal 2027, the analyst anticipates Sandisk earning $224 per share -- and potentially even more, as investors continue to "significantly" underestimate how long the current up-cycle in semiconductors might last.
How to value Sandisk stock
Semiconductor cycles can be volatile, so Bernstein's approach is to value Sandisk on the average of its earnings over a three-year period, 2026 to 2029. Base case: the analyst thinks Sandisk should average $114 per share per year over this period and applies an 11-times multiple, valuing the stock at roughly $1,250. But Sandisk may average closer to $224, in which case it would deserve a higher multiple on those earnings for the faster growth rate -- that's how Bernstein gets to a potential $3,000 valuation.
All this said, Sandisk has been losing money the past three years, so tread carefully. Sandisk might start earning a lot next year.
But if NAND prices plummet, it also might not.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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