This article first appeared on GuruFocus .
SanDisk ( NASDAQ:SNDK ) is drawing a more favorable response from analysts after unveiling a new customer contract model alongside stronger third-quarter results, with some firms saying the approach may reduce the memory maker's exposure to industry swings.
SanDisk said the framework centers on long-term supply agreements in which buyers commit to fixed volumes and pricing, sometimes with minimum purchase obligations. The company said it has already signed five deals covering more than one-third of expected output through fiscal 2027, with at least $42 billion in revenue and more than $11 billion in guaranteed commitments.
SanDisk's model has won support from firms including Morgan Stanley, Citi and BNP Paribas, which see a path to steadier earnings in a business that has historically moved with supply and demand cycles. Some agreements include take-or-pay terms, while others use price bands and volume floors.
Still, not all of the SanDisk reaction is fully settled. RBC analyst Srini Pajjuri said the stock could continue to trade on older cyclical patterns until the benefits of the new structure become clearer. Wall Street currently rates SanDisk a Strong Buy, with an average target implying further upside.
