Sandisk destroys consensus in Q4, but market acts unimpressed

Sandisk (SNDK) clobbered the Wall Street consensus late Wednesday, issuing a strong beat on the top and bottom lines for the fiscal fourth quarter ending in June.

The memory chip maker caught in an extreme shortage of memory chips worldwide reported adjusted earnings per share (EPS) of $39.25, beating the consensus by $4.73. Revenue of $8.39 billion also came in about $580 million ahead of consensus.

Wall Street had expected SanDisk to report earnings per share of $34.52 on revenue of $8.39 billion, but the results showed revenue up 372% YoY and 51% sequentially. Adjusted EPS grew from a base of $0.29 one year ago rise nearly 15,000% in the quarter that ended in June.

Blowout quarter fails to impress market

Sandisk shares strangely fell over 8% initially on the print but have since recovered about half of that figure.

The August 7 weekly options show the $1,370 strike holds the highest open interest on both the call and put sides, and fierce options trading in the aftermath of earnings might have been at least partially the culprit for the lackluster performance. Sandisk stock fell over 5% in the regular session as well with most of that downside coming in the final hour of trading.

But the quarterly result was hard to argue with. Sandisk management said that "revenue outperformance was driven by both our mix shift toward higher-value customers, with Datacenter up 437%, and higher pricing."

On a QoQ basis, gross margin climbed from an already steep 78.4% to 84.6% in Q4. Net income rose 91% from fiscal Q3 (March), while at the same time operating expenses fell by 1%.

The company signed five new longer-term agreements with customers, three of which were with new companies.

"We closed fiscal 2026 with a leading technology portfolio, established Datacenter as a key growth pillar, and deepened our customer partnerships," said David Goeckeler, Chairman and CEO of Sandisk. 

For fiscal Q1 2027, which ends in September, Goeckeler and company project revenue between $10.3 and $10.8 billion with adjusted EPS between $44 and $46.

Sandisk stock charts

With Sandisk inexplicably selling off afterhours, the chart shows it's possible for SNDK to retest the ascending bottom trendline near $1,050. Besides heavy options trading, SNDK's recent 40% surge over the past week could have led traders to take profits on the earnings event.

For bulls to get back in gear, Sandisk stock needs to overcome the slightly descending top trendline near $1,445.

The daily chart shows that the afterhours descent places SNDK beneath the 100-day Simple Moving Average (SMA), a bearish signal. But excited retail investors might just pump this thing up later this week, and almost definitely this month.

By overcoming the $1,445 level at the nearby top trendline, the 50-day SMA comes into view near $1,700. If the macro picture continues to offer support, it shouldn't be difficult to get there with management's optimistic projections taking center stage.