Sandisk Stock Has Lost About 64% Since June. Here's the Price at Which I'd Buy It.

Sandisk's (SNDK) stock has plummeted roughly 64% since June, falling from a record high of $2,335 to its current price of around $806. This steep decline comes as investors grappled with the outcome of the November midterm elections and the potential impact on data center construction. Sandisk's fiscal first-quarter earnings report, released on October 29, showed a 26% sequential increase in adjusted earnings per share to $49.51, and management guided for an additional 13% growth in the second quarter.

Revenue for the fiscal first quarter reached $11.0 billion, up 23% sequentially and 378% year-over-year, with data center customers contributing about $4.8 billion to the total. Despite the impressive earnings growth, Sandisk's valuation still appears low, trading at less than four times its annualized earnings. The company's guidance suggests that profits could continue to rise, although the rate of growth appears to be slowing.

Investors should be cautious of the cyclical nature of the memory industry, as profit margins can be affected by fluctuations in memory prices. The upcoming stock split, which will take place on November 9, could make the stock more accessible to smaller investors. However, until Sandisk's stock price reaches around $112 after the split, a cautious approach would be advisable.