SanDisk’s stock hype could ‘disappear in a single earnings call’, according to Citron Research. Is it time to ditch SNDK?

SanDisk (SNDK) is one of the most explosive momentum names, growing 145% year-to-date (YTD) and an astounding 1,050% year-over-year. However, this rally is now being put to the test by a high-profile short call by Citron Research. The company argues that the NAND flash cycle can turn faster, which could reverse the trend.

Citron’s research argues the following:

“Memory is cyclical, not structural. While the rise of artificial intelligence and hyperscalar demand has driven up prices and margins, the historical record is clear: eventually supply runs out. And with Samsung now signaling its commitment to maintaining premium margins, the risk is that the industry is becoming more competitive sooner than investors expect.”

SanDisk Corporation is one of the leading providers of NAND flash memory and storage solutions. The company serves the data center, edge, and consumer markets. It is based in California and spun off from Western Digital (WDC). The company has a current market capitalization of approximately $93.8 billion.

The stock has traded between $27.89 and $725 in the past year. This shows the stock is very volatile. The current price is around $590, which is significantly higher than the broader S&P 500 Index ($SPX).

The stock is trading high. The current price is 103.31 times earnings and 27.67 times forward earnings. The price/sales ratio is 12.75, and the price/book ratio is 9.18. These values ​​are high and indicate that investors are betting at a high margin. However, most of the prior earnings are favorable and indicate that investors expect earnings to grow rapidly.

The company is not profitable.

SanDisk reported a significant turnaround in its fiscal second quarter, which ended on January 2, 2026. In the most recent quarter, the company reported that revenue increased 61% compared to the same period last year, amounting to $3.025 billion. Meanwhile, non-GAAP diluted EPS increased significantly from $1.23 last year to $6.20 this year.

Non-GAAP gross margin also increased significantly, rising to 51.1% compared to 32.5% last year. The company also reported a strong increase in data center revenue, which rose 64% sequentially to $440 million due to increased demand for infrastructure products. In addition, the edge and consumer segments also reported strong growth.

Additionally, the guidance also helped investors become more positive about the stock, as the company estimated revenue for the third quarter between $4.4 billion and $4.8 billion, with non-GAAP EPS between $12 and $14. In addition, gross margins are also expected to increase further, with gross margins expected to be between 65% and 67%. This was also the main point of contention for Citron, which said that the NAND shortage could quickly reverse, and with Samsung re-entering the premium SSD market, prices could be affected, which could easily push EPS as it expands.

The company has not yet announced a date for its next earnings announcement.

Wall Street analysts are positive on the stock, with a consensus rating of “Average Buy” and a price target of $700.94, with a high target price of $1,000 and a low target price of $235. At current stock prices of around $590, the average target of $700.94 indicates an upside potential of around 19%. However, the large range of high and low targets reflects considerable uncertainty about typical earnings.

As of the date of publication, Yannis Zorumpanos had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com