Key Takeaways
- SK hynix’s US-listed shares closed 27% below their September high on Oct. 27, and Rosenblatt raised its target to $400 from $320 on Oct. 28, 175% above that close.
- A record third quarter backed the bull case, with an 80% operating margin and long-term contracts covering more than half of 2027 and 2028 capacity.
- Rosenblatt’s target works out to about 9x next-twelve-months earnings, nearly double the highest multiple the US shares have reached.
- Because the contracts fix volumes more than prices, the Street’s $243 average target is a better bet than Rosenblatt’s $400.
SK hynix (SKHY) went into its third-quarter report with its US-listed shares 27% below their September high. Rosenblatt’s Kevin Cassidy came out of it with a Buy rating and a $400 target on Oct. 28, 175% above Tuesday’s close of $145.36.
What knocked it off its high
Analysts have cut their 2027 earnings estimate for the US shares to $35.34, from $40.47 three months ago.
Then came China. In mid-October, CXMT said it would ship a server memory module on a denser chip design by the end of 2026, and SK hynix booked 24.3% of its sales in China in this year’s first quarter.
Rosenblatt thinks the market has memory wrong
Third-quarter revenue hit W104.6 trillion (about $79 billion), at an 80% operating margin. Long-term agreements with 14 customers now cover more than half of SK hynix’s 2027 and 2028 capacity.
Cassidy argued in August that new memory fabs take three to five years to start producing: “With SKHY trading at a cycle trough, the market is pricing the stock as if memory fundamentals remain unchanged.”
TIKR tracks 16 analysts on SK hynix. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on SK hynix, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See SK hynix’s Analyst Ratings
What $400 asks of investors
The 14 targets on the US shares averaged $243 on Oct. 27, 68% above Tuesday’s close, and the average has only drifted lower since the July listing.
Earnings estimates still climb every year through 2028.
And nothing in the report argues for cutting them: management said it plans 2027 results “at a significantly higher level, both in terms of absolute revenue and profit.”
The stock trades at 3.3x forward earnings, under its 4.0x average since its July US listing.
$400 is about 9x the roughly $44 a share analysts expect over the next twelve months, nearly double that chart’s 4.6x high. SK hynix’s Korean shares have averaged 9.2x at quarter-ends since 2014. But the market keeps this multiple low when it expects earnings to fall: the Korean shares sat near similar lows in 2018, and operating profit fell 87% in 2019.
$400 needs the cycle to be over
SK hynix’s contracts let prices move: they’re “generally designed to reflect market conditions within a price range agreed upon with the customer.”
My take: Rosenblatt is right that SK hynix is cheap. But $400 within a year needs investors to stop pricing in a memory downturn, and contracts that fix volumes more than prices won’t get them there. The Street’s $243 is the better bet.
Fourth-quarter results in late January should put a number on 2027 spending, and a plan paced to signed contracts would make a higher multiple much easier to defend.
So what is SK hynix stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
