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SanDisk Corp

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SanDisk Corp AI Insights

Informational only. Not investment advice.
As of 2025-12-10

Snapshot

  • Goodwill of 5.0B is 53% of equity and 114% of tangible book value - material impairment risk if memory market deteriorates further[Goodwill]
  • Net loss of -1.74B TTM yet FCF positive at 516M - non-cash charges masking operational cash generation[Free Cash Flow TTM]
  • R&D at 1.17B (15% of revenue) vs industry median 45M - heavy innovation spend despite losses[Research and Development TTM]

Watch Triggers

  • Gross Margin TTM: Rises above 35%Memory pricing recovery signal; current 28% is cyclical trough level
  • Free Cash Flow TTM: Turns negativeWould signal operational deterioration beyond accounting losses
  • Goodwill: Impairment charge announced5B goodwill vs 9.4B equity - writedown would crater book value

Bull Case

FCF of 516M TTM despite deep losses shows operational resilience; 1.44B cash provides runway through cycle trough

Free Cash Flow TTMCash and Equivalents

P/S of 4.5x vs industry median 3.0x modest premium for scale player; tangible book of 4.4B provides downside floor

PS RatioTangible Book Value

Bear Case

EPS declined 46% YoY with negative EBITDA (-1.38B) - losses accelerating not stabilizing

EPS Growth 1yrEBITDA TTM

Gross profit down 5.4% YoY while carrying 5B goodwill - impairment could wipe 53% of equity

Gross Profit 1yr GrowthGoodwill

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

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Forward Thesis

Memory cycle recovery could drive margin expansion from 5% operating margin to double digits

1-3ymed
  • Gross margin 28% TTM has room to expand with pricing recovery
  • R&D leverage as revenue scales on fixed cost base
  • Debt paydown (-500M TTM) reducing interest burden
Operating margin 5% vs industry median 2.4%FCF positive 516M despite -1.74B net lossDebt/equity 0.16 provides balance sheet flexibility

Valuation Context

Caveats

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