Jefferies cut its SanDisk price target 42% despite record earnings

This morning, Jefferies slashed its price target on SanDisk stock 42% from $3,000 to $1,750. ZeroHedge laughed out loud at the drastic action.

Just six weeks ago, on June 26, analysts at the investment bank had set their $3,000 price target. Nonetheless, SanDisk stock price is down, even after the AI chipmaker reported the best quarterly earnings in its history yesterday.

Its most recent quarterly revenue was a 372% year-over-year gain to $8.97 billion, far surpassing its own guidance range of $7.75-8.25 billion.

Non-GAAP gross margin landed at 84.6%, dwarfing the prior year’s 26.4% and beating its guidance range of 79-81%. Non-GAAP earnings of $39.25 per share beat a FactSet consensus of analysts’ estimates by more than 12%.

Numbers from the blockbuster quarter were invariably positive. Data center revenue, the business SanDisk spent a year building, grew 103% in a single quarter to $2.98 billion.

Chairman and CEO David Goeckeler told analysts the company “delivered record revenue, gross margin, and earnings per share, each above the high end of our guidance, and repurchased $4.5 billion of company stock.”

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