Smart Global Holdings (SGH) has reported better-than-expected quarterly earnings and revenue for the fiscal second quarter of 2022 (ended February 25, 2022). The company designs, manufactures and sells specialty memory solutions and services for the Electronics industry.
Adjusted earnings of $0.87 per share surpassed Street’s expectations of $0.72 per share. The figure also compares favorably with earnings of $0.44 per share reported in the year-ago quarter.
Revenue jumped 48% year-over-year to $449 million. Also, it surpassed analysts’ expectations of $435 million. Further, gross margin came in at 25.1%, up 750 basis points from the year-ago quarter.
Alongside earnings, Smart Global announced that its board of directors approved a share buyback program of up to $75 million. The repurchases will be made from time to time through open market purchases or privately negotiated transactions. Also, the program has no expiration date but may be suspended or terminated by the board at any time.
The CEO of Smart Global, Mark Adams, said, “The results reflect our commitment to operational excellence by focusing on specialty solutions targeting growth markets such as AI, machine learning, data analytics, enterprise storage and edge/IoT. Across all of our businesses, we are investing to capitalize on the growth opportunities in these market segments.”
Outlook
For the third quarter of the Fiscal Year 2022, the company expects net sales between $435 million and $475 million. Further, the company’s adjusted earnings are anticipated in the range of $0.75 to $0.80 per share and gross margin between 23% and 25%.
Stock Rating
Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on four unanimous Buys. Smart Global’s price forecast of $43.13 implies upside potential of about 86.2% from current levels.
Positive Sentiments
According to TipRanks’ Stock Investors tool, investors seem bullish on Smart Global. Per the tool, 9.2% of investors holding portfolios on TipRanks have increased their stake in SGH stock over the last 30 days. Further, 3.4% of these individuals have raised their holdings in the recent week.
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