Sandisk's (SNDK) long-term targets suggest Wedbush Securities' fiscal 2028 estimates understate the company's earnings potential, the brokerage said in a note on Friday.
The data storage devices maker laid out its 2028-2030 guidance at its investor day Thursday, estimating revenue growth in the mid-to-high teens range and adjusted gross margins of about 80%.
For fiscal 2027, Sandisk reiterated expectations for mid-teens "bit growth," Wedbush said. That metric captures the amount of storage capacity it produces.
The company's long-term targets are underpinned by its new business models, which secured $93.9 billion in total contract value across eight data center customers, Wedbush analyst Matt Bryson said.
"We retain some skepticism around many of the key points from the analyst day," including concerns that memory will remain cyclical, Bryson said.
"At the same time, we also believe our (2028) estimates most likely understate (Sandisk's) earnings power," Bryson said.
The company is set to repurchase a significant amount of stock over the next few years, which, combined with a lengthier deal duration cycle, deserves some premium, he wrote.
Sandisk's shares closed 7.4% higher on Friday, having skyrocketed 591% this year.
Last week, the company reported sharp annual gains in fiscal fourth-quarter revenue as it swung to adjusted earnings on a per-share basis.
Wedbush reiterated its outperform rating on Sandisk's stock, with a $2,000 price target.
