Sandisk's (SNDK) long-term growth and margin targets are above RBC Capital Markets' estimates, while the brokerage said the company remains confident in the sustainability of pricing under its new business model, supported by financial guarantees including three US hyperscalers.

The company's long-term targets for fiscal 2028 to fiscal 2030 call for mid-to-high teens annual revenue growth, approximately 80% non-GAAP gross margin, 75% non-GAAP operating margin, and about 50% adjusted free cash flow margin, according to the note Thursday.

Management expects new business model pricing to be higher than floor pricing. It emphasized that agreements under the new model are multi-year, are detailed by quarter or month, include fixed pricing with variable components, and are supported by financial guarantees, the brokerage said.

Management also highlighted rising customer interest in high bandwidth flash, with sample production targeted for 2027, the brokerage added.

RBC kept a sector perform rating on Sandisk and raised its price target to $1,600 from $1,300.

Shares of Sandisk were up 6.3% in Friday trading.

Price: 1625.14, Change: +97.03, Percent Change: +6.35