SK hynix's board approved a ₩40 trillion ($28.69 billion) share buyback on Aug. 19, with permanent cancellation of every repurchased share. The read-through is straightforward: management believes the market is still underpricing the stock. That conviction arrives alongside an analyst consensus forecasting a 99.4% year-over-year EPS drop in the current quarter. Both can be true at once, and the three-month program is where the resolution comes.
The financial backing
The underlying numbers give management something to stand on. SK hynix (Nasdaq: SKHY), the South Korean memory-chip maker, generated ₩79.3 trillion ($56.9 billion) in Q2 2026 revenue, up 256.8% from the year-earlier period. Operating profit climbed 557.2% year-over-year to ₩60.5 trillion ($43.4 billion), and net income of ₩93.9 trillion ($67.4 billion) marked a 1,242.5% year-over-year increase. The figures were SK hynix's strongest quarterly results on record. Shares gained 17.52% in the single trading session following the July 29 release.
The balance sheet amplifies the case. The company ended Q2 with ₩88 trillion ($63.12 billion) in cash against ₩18.6 trillion ($13.34 billion) of debt, a net cash position of ₩69.4 trillion ($49.78 billion). At the Aug. 18 closing price of ₩1,662,000 ($1,192.13), the buyback could cover roughly 24.07 million shares, about 3.3% of the 730,492,365 shares outstanding. The program begins Aug. 20 and runs three months. Permanent cancellation converts that float reduction into realized EPS accretion rather than treasury math.
Demand remains intact. SK hynix has begun mass shipments of HBM4, plans to accelerate production in the second half of 2026, and has signed long-term supply agreements with roughly 10 customers. High-bandwidth memory, AI server DRAM, and enterprise SSDs all saw strong uptake from data-center operators in Q2.
The counterargument
The counterargument deserves full weight. Analysts project Q3 FY2026 EPS to fall 99.4% year-over-year to $5.97, and full-year FY2026 EPS could drop 97.5% from the prior year to $25.48. Recovery is expected in FY2027, where analyst consensus stands at $32.46, up 27.4% year-over-year. That is a year-plus earnings trough investors accept or step around, and the buyback alone does not close that gap.
On balance, 15 analysts covering SKHY carry an average price target of $245.40, implying 57.1% upside, with 11 of those 15 rating the stock a Strong Buy. The line to watch is whether the near-term EPS compression triggers enough selling to overwhelm the 3.3% float reduction before HBM4 volumes register in the income statement.