Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 2 Jun 2026
SNDK· Technology
Sandisk
Sandisk sells memory chips with a fortress balance sheet, but a 53.9 times earnings price asks you to pay up for a deeply cyclical business.
Buffett fit
Partial fit
Owner
45
Durability
9
Management
35
Price
20
Score updated 29 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Sandisk, I would admire the cash on hand and lose sleep over the earnings.
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Durability scores a 9 out of 100 for good reason. Revenue has shrunk at a 6.8 percent annual rate, the five-year return on capital is negative 4.4 percent, and the earnings history swings hard from peak to trough.
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Management keeps a clean ledger with zero and net cash, which I respect.
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There is no here at 53.9 times earnings. The yield is actually negative at about minus 0.05 percent, which means I would be paying a premium price for a business that generated essentially no owner earnings this year.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Fortress balance sheet with zero and net cash, shown by a net debt to EBITDA of negative 0.68.
- 2Very strong liquidity, with a current ratio of 4.78 covering near-term obligations many times over.
- 3Interest coverage of 43.5 times means debt service is a non-issue even in a downturn.
- 4Headline profitability is high today, with a 56 percent and a 41 percent .
Concerns
7- 1The stock is expensive at 53.9 times trailing earnings while the yield is negative at about minus 0.05 percent, so the price assumes a perfect cycle.
- 2Durability scores just 9 out of 100, the central weakness in this business.
- 3Five-year return on capital is negative 4.4 percent, proof that a full memory bust already erased returns once.
- 4 was only about 7 percent of net income, so reported profit is not converting into cash.
Price history
$1,330+3,529.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Sandisk makes and sells NAND flash memory and storage products, the chips that go into phones, laptops, cameras and data centers. Right now it earns a 56 percent and a 41 percent , which looks rich, but memory is a commodity and those margins swing violently with the price of flash. A negative 4.4 percent return on capital over five years tells you this business has already lived through a full bust, even though the trailing return on capital reads a healthy 31 percent today.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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