This article first appeared on GuruFocus.
Sandisk Corp. (SNDK, Financials), the data storage and flash-memory company, surged nearly 14% after unveiling a long-term financial framework that points to sharply higher margins and stronger cash generation.
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At its Investor Day, Sandisk said it expects revenue to grow at a mid-to-high teens rate from fiscal 2028 through fiscal 2030.
The company is also targeting adjusted gross margins of about 80% and adjusted operating margins near 75% over that period.
Free cash flow is another major part of the outlook.
Sandisk expects an adjusted free-cash-flow margin of roughly 50% after taxes, capital spending and working-capital needs. Management also said it intends to return 100% of excess cash to shareholders after investing in the business.
The outlook helped lift other storage and memory names as well, with Western Digital, SK Hynix, Micron and Seagate all gaining.
For investors, the key question is whether Sandisk can sustain those unusually strong profitability targets through the memory cycle.