SanDisk Stock To $478?
SanDisk (SNDK) stock has jumped 15% during the past day, and is currently trading at $665.24. Our multi-factor assessment suggests that it may be time to reduce exposure to SNDK stock. We are primarily concerned current valuation and a price of $478 may not be out of reach. We believe there is not much to fear in SNDK stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | N/A |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $98 Bil in market cap, SanDisk provides solid state drives and data storage solutions for client computing applications, serving both domestic and international markets.
[1] Valuation Looks Very High
| SNDK | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 11.2 | 3.3 |
| Price-to-Earnings Ratio | -96.4 | 24.3 |
| Price-to-Free Cash Flow Ratio | 69.2 | 21.6 |
This table highlights how SNDK is valued vs broader market. For more details see: SNDK Valuation Ratios
[2] Growth Is Very Strong
- SanDisk has seen its top line grow at an average rate of 14.4% over the last 3 years
- Its revenues have grown 24% from $7.2 Bil to $8.9 Bil in the last 12 months
- Also, its quarterly revenues grew 61.2% to $3.0 Bil in the most recent quarter from $1.9 Bil a year ago.
| SNDK | S&P 500 | |
|---|---|---|
| 3-Year Average | 14.4% | 5.6% |
| Latest Twelve Months* | 23.6% | 6.4% |
| Most Recent Quarter (YoY)* | 61.2% | 7.3% |
This table highlights how SNDK is growing vs broader market. For more details see: SNDK Revenue Comparison
[3] Profitability Appears Weak
- SNDK last 12 month operating income was $1.3 Bil representing operating margin of 14.3%
- With cash flow margin of 18.2%, it generated nearly $1.6 Bil in operating cash flow over this period
- For the same period, SNDK generated nearly $-1.0 Bil in net income, suggesting net margin of about -11.7%
| SNDK | S&P 500 | |
|---|---|---|
| Current Operating Margin | 14.3% | 18.8% |
| Current OCF Margin | 18.2% | 20.5% |
| Current Net Income Margin | -11.7% | 13.1% |
This table highlights how SNDK profitability vs broader market. For more details see: SNDK Operating Income Comparison
[4] Financial Stability Looks Very Strong
- SNDK Debt was $789 Mil at the end of the most recent quarter, while its current Market Cap is $98 Bil. This implies Debt-to-Equity Ratio of 0.8%
- SNDK Cash (including cash equivalents) makes up $1.5 Bil of $13 Bil in total Assets. This yields a Cash-to-Assets Ratio of 11.8%
| SNDK | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 0.8% | 19.7% |
| Current Cash-to-Assets Ratio | 11.8% | 7.2% |
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