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Sanmina-Sci Corp. (SANM)
NASDAQ:SANM
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Sanmina-Sci
(NASDAQ:SANM)74Outperform
Positive Factors
Share buybacks
The board authorized a new $300 million share buyback.
Telecom recovery
SANM should benefit on the Telecom side as networking comes out of an inventory correction.
Negative Factors
Revenue challenges
Revenue guidance for F1Q25 of $1.975bn was lower than Street at $2.0bn.
Sanmina-Sci (SANM) vs. S&P 500 (SPY)
Market Cap
$4.14B
Dividend YieldN/A
Average Volume (3M)492.31K
Price to Earnings (P/E)18.6
Beta (1Y)1.39
Revenue Growth-8.92%
EPS Growth-12.11%
CountryUS
Employees37,000
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)4.09
Shares Outstanding54,325,317
10 Day Avg. Volume409,080
30 Day Avg. Volume492,305
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.54
Price to Cash Flow (P/CF)16.20
P/FCF Ratio22.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$91.00Price Target Upside19.30% Upside
Rating ConsensusHold
Number of Analyst Covering3
Sanmina-Sci Business Overview & Revenue Model
Company DescriptionSanmina Corporation, operating under the ticker symbol SANM, is a leading integrated manufacturing solutions provider serving the global electronics manufacturing services (EMS) market. The company specializes in providing end-to-end design, engineering, and manufacturing solutions primarily for the communications networks, computing and storage, medical, defense and aerospace, industrial and semiconductor, and automotive sectors. With a comprehensive suite of services, Sanmina supports its customers from initial product concept through final production and logistics.
How the Company Makes MoneySanmina makes money by offering a broad range of electronic manufacturing services, including product design, engineering, prototyping, supply chain management, and final assembly. The company's revenue streams are diversified across various sectors, with significant contributions from communications networks, computing and storage, and other high-tech industries. Sanmina's business model relies on long-term contracts with major corporations, leveraging its global manufacturing footprint to provide cost-effective and scalable solutions. Additionally, strategic partnerships and its ability to adapt to the technological needs of its clients play a crucial role in sustaining and growing its revenue base.
Sanmina-Sci Financial Statement Overview
Summary
Sanmina-Sci exhibits robust profitability and a strong balance sheet. The income statement reflects stable margins, though there is a slight decline in operational margins, suggesting rising costs. The balance sheet is solid with low leverage, and cash flow management is effective, despite some inconsistency in free cash flow growth.Income Statement
Sanmina-Sci shows strong profitability with a stable gross profit margin and net profit margin over the TTM period. The revenue growth rate is moderate, indicating steady business expansion. However, there is a slight decline in EBIT and EBITDA margins, which may suggest rising operational costs or competitive pressures.72
Positive
Balance Sheet
The company's balance sheet exhibits a healthy equity ratio, indicating a strong equity base relative to total assets. The debt-to-equity ratio is low, reflecting prudent financial management and low leverage. Return on equity remains solid, demonstrating efficient use of shareholder funds.78
Positive
Cash Flow
Cash flow analysis reveals a positive free cash flow trajectory, although growth has been inconsistent. The operating cash flow to net income ratio highlights operational efficiency. However, the free cash flow to net income ratio could be improved to strengthen the company's cash position.65
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.70B | 7.57B | 8.94B | 7.89B | 6.76B | 6.96B | Gross Profit |
| 647.50M | 640.43M | 743.21M | 640.51M | 551.80M | 525.71M | EBIT |
| 341.60M | 335.49M | 455.66M | 367.79M | 281.30M | 227.69M | EBITDA |
| 470.03M | 469.14M | 579.95M | 463.08M | 380.65M | 366.75M | Net Income Common Stockholders |
| 230.47M | 222.54M | 309.97M | 240.38M | 249.55M | 133.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 642.40M | 625.86M | 667.57M | 529.86M | 650.03M | 480.53M | Total Assets |
| 4.81B | 4.82B | 4.87B | 4.86B | 4.21B | 3.77B | Total Debt |
| 374.57M | 317.32M | 338.27M | 346.74M | 330.32M | 348.00M | Net Debt |
| -267.83M | -308.54M | -329.30M | -183.12M | -319.70M | -132.53M | Total Liabilities |
| 2.39B | 2.46B | 2.56B | 3.00B | 2.33B | 2.14B | Stockholders Equity |
| 2.25B | 2.20B | 2.32B | 1.86B | 1.88B | 1.63B |
| Cash Flow | Free Cash Flow | ||||
| 186.06M | 228.99M | 45.21M | 200.64M | 266.13M | 236.15M | Operating Cash Flow |
| 278.13M | 340.22M | 235.17M | 330.85M | 338.34M | 300.56M | Investing Cash Flow |
| -96.80M | -114.40M | -192.46M | -132.21M | -91.33M | -64.41M | Financing Cash Flow |
| -170.10M | -269.71M | 94.50M | -314.30M | -77.32M | -210.28M |
Sanmina-Sci Technical Analysis
Negative
76.28
Price Trends
82.13
Negative
78.84
Negative
73.54
Positive
Market Momentum
-2.09
Positive
34.63
Neutral
17.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SANM, the sentiment is Negative. The current price of 76.28 is below the 20-day moving average (MA) of 84.21, below the 50-day MA of 82.13, and above the 200-day MA of 73.54, indicating a neutral trend. The MACD of -2.09 indicates Positive momentum. The RSI at 34.63 is Neutral, neither overbought nor oversold. The STOCH value of 17.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SANM.
Sanmina-Sci Risk Analysis
Sanmina-Sci disclosed 30 risk factors in its most recent earnings report. Sanmina-Sci reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sanmina-Sci Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.14B | 13.26 | 62.69% | 0.23% | -17.83% | 76.43% | |
79 Outperform | $15.14B | 25.19 | 20.73% | ― | 23.03% | 87.92% | |
74 Outperform | $4.14B | 18.65 | 10.55% | ― | -8.92% | -12.11% | |
73 Outperform | $3.37B | 28.93 | 9.27% | ― | -3.53% | -3.90% | |
71 Outperform | $13.20B | 14.05 | 18.45% | ― | -12.94% | 47.70% | |
69 Neutral | $2.32B | 42.40 | 3.66% | ― | 9.41% | ― | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
SANM
Sanmina-Sci
76.28
11.58
17.90%
FLEX
Flex
34.70
5.92
20.57%
JBL
Jabil
139.95
-7.53
-5.11%
PLXS
Plexus
124.76
31.26
33.43%
TTMI
TTM Technologies
22.96
8.25
56.08%
TSE:CLS
Celestica
130.38
71.52
121.51%
Sanmina-Sci Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: -2.84% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
Sanmina delivered a strong first quarter performance with significant revenue growth driven by the communications networks and cloud infrastructure segments. The company maintained a robust balance sheet and demonstrated effective cash flow management, allowing for strategic investments and shareholder returns. However, challenges remain in managing CPS segment margins and operating expenses. Overall, the positive aspects of revenue growth, financial performance, and strategic initiatives outweigh the challenges faced.Highlights
Solid Revenue Growth
Sanmina achieved a revenue of $2.01 billion for the first quarter of fiscal year 2025, which represents a 7.0% increase compared to the same period a year ago.
Strong Performance in Communications Networks and Cloud Infrastructure
The communications networks and cloud infrastructure end-markets grew by 19% year-over-year, contributing significantly to the overall revenue growth.
Improvement in Non-GAAP Financial Metrics
Non-GAAP gross margin improved to 9.0%, and non-GAAP diluted earnings per share increased by 10.8% compared to the same period a year ago.
Robust Balance Sheet
Sanmina ended the quarter with $642 million in cash and no outstanding borrowings, providing substantial liquidity of approximately $1.5 billion.
Strong Free Cash Flow
The company reported a free cash flow of $47 million for the quarter, enabling continued investment in business growth and shareholder returns.
Share Repurchase Authorization
Sanmina's Board of Directors authorized an additional $300 million for share repurchases, reflecting confidence in the company's valuation and future prospects.
Lowlights
Pressure on CPS Segment Gross Margin
The CPS segment experienced a gross margin decline of 40 basis points year-over-year, driven by unfavorable mix.
Slight Increase in Operating Expenses
Non-GAAP operating expenses were $67.4 million, slightly above the company's outlook due to targeted investments for future growth.
Inventory Management Challenges
Although inventory reduced by approximately 5% year-over-year, further improvements are needed to align with historical levels.
Company Guidance
During Sanmina's First Quarter Fiscal 2025 earnings call, the company provided robust guidance and performance metrics. They reported a revenue of $2.01 billion, which was a 7.0% increase compared to the same period a year ago. Their non-GAAP operating margin reached 5.6%, while the non-GAAP gross margin was 9.0%, both exceeding their outlook. The non-GAAP earnings per share were $1.44, reflecting a 10.8% increase from the prior year, or 16.2% when normalized for tax rate changes. The company highlighted significant growth in the communications networks and cloud infrastructure end-markets, with a year-over-year increase of 19%. For the second quarter, Sanmina expects revenue between $1.9 billion and $2.0 billion, a non-GAAP gross margin of 8.4% to 8.8%, and non-GAAP EPS in the range of $1.30 to $1.40. Additionally, they announced a $300 million share repurchase authorization, emphasizing their strategy of disciplined capital allocation to maximize shareholder value.Sanmina-Sci Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Sanmina-Sci Approves 2025 Corporate Bonus Plan
Neutral
Dec 12, 2024
Sanmina-Sci’s Compensation Committee has approved the Fiscal Year 2025 Corporate Bonus Plan, which sets specific targets for revenue, non-GAAP operating margin, and cash flow from operations. The plan outlines that incentive compensation for fiscal 2025 will depend on the company’s performance against these targets and individual or divisional goals, with potential adjustments by the committee.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.