Sandisk Corp (NASDAQ: SNDK)

Sector: Technology Industry: Computer Hardware CIK: 0002023554
Market Cap 34.41 Bn
P/B 3.67
P/E -19.78
P/S 4.42
ROIC (Qtr) -12.56
Div Yield % 0.00
Rev 1y % (Qtr) 22.57
Total Debt (Qtr) 1.35 Bn
Debt/Equity (Qtr) 0.14

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 703M provides robust 0.52x coverage of total debt 1.35B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.44B provide 72.10x coverage of short-term debt 20M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 7.75B provides 5.74x coverage of total debt 1.35B, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 516M exceeds capital expenditure of 187M by 2.76x, indicating strong organic growth funding capability.
  • Tangible assets of 7.75B provide robust 12.67x coverage of other current liabilities 612M, indicating strong asset backing.

Bear case

  • Investment activities of 560M provide weak support for R&D spending of 1.17B, which is 0.48x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 703M shows concerning coverage of stock compensation expenses of 194M, with a 3.62 ratio indicating potential earnings quality issues.
  • Operating earnings of (1.52B) show weak coverage of depreciation charges of 145M, with a -10.49 ratio indicating high capital intensity and potential reinvestment needs.
  • Long-term investments of 602M represent a high 0.96x of fixed assets 630M, indicating potential overexposure to financial assets versus operational capabilities.
  • Free cash flow of 516M represents just 0.27x of debt issuance 1.89B, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Computer Hardware
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ANET Arista Networks, Inc. 164.72 Bn 49.07 19.50 0.00 Bn
2 DELL Dell Technologies Inc. 86.37 Bn 16.20 0.83 31.24 Bn
3 WDC Western Digital Corp 60.34 Bn 23.73 5.03 4.68 Bn
4 STX Seagate Technology Holdings plc 58.67 Bn 34.25 6.14 4.99 Bn
5 SNDK Sandisk Corp 34.41 Bn -19.78 4.42 1.35 Bn
6 PSTG Pure Storage, Inc. 21.84 Bn 167.52 6.27 0.23 Bn
7 HPQ Hp Inc 21.10 Bn 8.34 0.38 9.67 Bn
8 SMCI Super Micro Computer, Inc. 17.45 Bn 22.01 0.83 4.78 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.73 2.06
EV to Cash from Ops. EV/CFO 49.58 -0.65
EV to Debt EV to Debt 25.80 56.37
EV to EBIT EV/EBIT -22.91 2.89
EV to EBITDA EV/EBITDA -25.42 -1.74
EV to Free Cash Flow [EV/FCF] EV/FCF 67.54 -7.44
EV to Market Cap EV to Market Cap 1.01 7.64
EV to Revenue EV/Rev 4.48 78.30
Price to Book Value [P/B] P/B 3.67 -28.73
Price to Earnings [P/E] P/E -19.78 6.39
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.25
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.30
Dividend per Basic Share Div per Share (Qtr) 0.00 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.93
Interest Coverage Int. cover (Qtr) -15.06 -105.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 9.22 -11.38
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 347.83 867.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -2,655.49 -189.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -358.19 -40.76
EBIT Growth (1y) % EBIT 1y % (Qtr) -626.30 -117.00
EBT Growth (1y) % EBT 1y % (Qtr) -728.68 -116.68
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -70.06
FCF Growth (1y) % FCF 1y % (Qtr) 208.18 712.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.42 34.90
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.61 0.80
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.95 7.26
Current Ratio Curr Ratio (Qtr) 3.29 13.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.14 -3.57
Interest Cover Ratio Int Coverage (Qtr) -15.06 -105.42
Times Interest Earned Times Interest Earned (Qtr) -15.06 -105.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -17.70 -629.92
EBIT Margin % EBIT Margin % (Qtr) -19.55 -683.67
EBT Margin % EBT Margin % (Qtr) -20.85 -687.58
Gross Margin % Gross Margin % (Qtr) 27.90 34.79
Net Profit Margin % Net Margin % (Qtr) -22.40 -692.43