Sandisk (SNDK) Buyback: $15.5 Billion Aimed at a Stock Trading Near 10x Run-Rate Earnings
Sandisk spent $4.5 billion on its own stock in the roughly nine weeks between the board’s April 30 authorization and the July 3 fiscal year-end. On August 5 the board added another $14 billion. That leaves $15.5 billion of firepower pointed at a stock trading around $1,600, about a third below the June 25 record close of $2,354.39. The correction took the price down. It didn’t touch the cash.
The $14 billion headline matters less than the $5.035 billion of adjusted free cash flow Sandisk generated in fiscal Q4, of which the $4.5 billion repurchase absorbed 89%. Annualize that quarter and the company throws off more than $20 billion a year. With about 149 million shares outstanding, the market cap sits near $240 billion, so the stock trades at roughly an 8% free cash flow yield on the current run rate. The entire remaining authorization is less than one year of cash at the Q4 pace. At $1,600 it retires about 9.7 million shares, or around 6.5% of the company, and management’s Investor Day framework commits to returning 100% of excess cash from here. This authorization will need topping up again.
The earnings side tells the same story. Fiscal Q4 EPS came in at $39.25. Four of those is about $157 a year, which puts the stock near 10 times run-rate earnings for a business printing an 84.6% gross margin (up from 26.2% a year earlier). Fiscal 2026 revenue rose 175% to $20.2 billion, and net income swung from a $1.6 billion loss to $11.4 billion. Operating cash flow went from $84 million to $11.7 billion in twelve months. The market is pricing that as a cyclical peak. The contracts say otherwise.
Sandisk’s NBM agreements now cover roughly half of fiscal 2027 bits and about two-thirds of fiscal 2028 bits across eight customers, with floor prices around $0.29 per gigabyte. That converts a spot-exposed commodity stream into something closer to contracted revenue, and it’s why the Investor Day model can guide to mid-to-high-teens revenue growth through fiscal 2030 with adjusted gross margins near 80% and free cash flow margins around 50%. Data center revenue grew 437% year over year in Q4 and is now close to a quarter of the business. Mizuho expects the memory market to stay 30% to 50% undersupplied through 2027, and it sees high-bandwidth flash (a market Sandisk is building into) tightening NAND supply further next year.
Now combine the two engines. Flat net income plus an 8% annual share count reduction lifts EPS 8% a year on its own. Add the guided mid-to-high-teens top-line growth and per-share earnings compound in the low-to-mid 20s. Few large caps offer that at 10 times earnings.
The moat sits in the balance sheet structure. Sandisk makes its flash through the Kioxia joint venture in Japan and carries just $674 million of net PP&E against $20.2 billion of annual revenue. Cost of revenue fell 1.4% year over year in Q4 while revenue rose 372%, which shows how little of each incremental pricing dollar leaks out before it reaches the cash line. Competitors are pouring capital into DRAM and HBM capacity. Sandisk sends its cash back to shareholders instead. The 9th-generation CBA parts announced with Kioxia in August push performance and pricing tiers higher on the existing 8th-generation cell array, adding revenue per wafer without adding a single bit of industry supply. That’s the kind of technology roadmap a NAND holder wants.
On the stock, Bernstein carries a $3,000 target, and a $2,100 target was reaffirmed earlier this month. A base case of $2,000 to $2,350 into and after the early-November print implies only 13 to 15 times run-rate EPS and a retest of the June high. The bull case of $3,000 works out to about 19 times annualized Q4 earnings. The shares were above $2,300 less than three months ago on smaller numbers than the company is producing now.
The figure to watch in the November report is the share count. Another $4 billion-plus quarter of repurchases at these prices takes about 2% of Sandisk off the table in 90 days. The company is buying the dip for you.