$SNDK SanDisk reports earnings tonight at 4:30 a.m. I’m betting it will follow AMD’s old path from last night.
A seven-day winning streak rally surged into the earnings release. It bounced back forty points from the lows. Most of the good news is already priced in. The key issue is this: the Street consensus revenue is 8.4 billion, while the company’s guidance upper end is only 8.25 billion. If consensus is higher than guidance, then hitting the guidance upper limit would still mean failing.
The NAND super-cycle is real, and the supply-demand shortfall is right there. But strong fundamentals and a rising stock price are two different things. Last night AMD’s revenue guidance beat expectations across the board, and it still fell another ten points after-hours.
Most likely scenario: revenue beats guidance but matches consensus, and management pushes next year’s guidance to the 13th Investors Day. After-hours, it will first surge and then pull back by five to ten points. Implied volatility, currently at 25, gets squeezed further; combined with profit-taking from the forty-point run, that’s more than enough to make for a rough ride. People who went in during the seven-day streak tonight will probably end up paying tuition.
A seven-day winning streak rally surged into the earnings release. It bounced back forty points from the lows. Most of the good news is already priced in. The key issue is this: the Street consensus revenue is 8.4 billion, while the company’s guidance upper end is only 8.25 billion. If consensus is higher than guidance, then hitting the guidance upper limit would still mean failing.
The NAND super-cycle is real, and the supply-demand shortfall is right there. But strong fundamentals and a rising stock price are two different things. Last night AMD’s revenue guidance beat expectations across the board, and it still fell another ten points after-hours.
Most likely scenario: revenue beats guidance but matches consensus, and management pushes next year’s guidance to the 13th Investors Day. After-hours, it will first surge and then pull back by five to ten points. Implied volatility, currently at 25, gets squeezed further; combined with profit-taking from the forty-point run, that’s more than enough to make for a rough ride. People who went in during the seven-day streak tonight will probably end up paying tuition.