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Sanmina-Sci Corp. (SANM)
NASDAQ:SANM
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Sanmina-Sci
(NASDAQ:SANM)
78Outperform
Positive Factors
Financial Performance
Gross margins stronger than expected.
Revenue Growth
Sanmina reported a strong F2Q with revenue at the high end of guidance, and GM and EPS above guidance.
Telecom Sector
SANM should benefit on the Telecom side as networking comes out of an inventory correction.
Negative Factors
Automotive Sector
Automotive remains challenging.
Macroeconomic Concerns
Recovery in the communications end market is balanced by an uncertain macroeconomic and tough operating environment, and program ramps that need to develop.
Operating Environment
The operating environment remains tough, and weak end markets could lead to program pushouts.
Sanmina-Sci (SANM) vs. S&P 500 (SPY)
Market Cap
$4.52B
Dividend YieldN/A
Average Volume (3M)388.69K
Price to Earnings (P/E)19.6
Beta (1Y)1.42
Revenue Growth-1.50%
EPS Growth1.84%
CountryUS
Employees32,000
SectorTechnology
Sector Strength76
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.41
Shares Outstanding53,463,806
10 Day Avg. Volume278,479
30 Day Avg. Volume388,685
Financial Highlights & Ratios
PEG Ratio3.07
Price to Book (P/B)1.93
Price to Sales (P/S)0.00
P/FCF Ratio15.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$87.00Price Target Upside6.92% Upside
Rating ConsensusHold
Number of Analyst Covering1
Sanmina-Sci Business Overview & Revenue Model
Company DescriptionSanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide. It operates in two businesses, Integrated Manufacturing Solutions; and Components, Products and Services. The company offers product design and engineering, including concept development, detailed design, prototyping, validation, preproduction, manufacturing design release, and product industrialization; assembly and test services; direct order fulfillment and logistics services; after-market product service and support; and supply chain management services, as well as engages in the manufacturing of components, subassemblies, and complete systems. In addition, the company provides interconnect systems, such as printed circuit board fabrication, backplane, cable assemblies, and plastic injection moldings; mechanical systems comprising enclosures and precision machining; memory, storage platforms, radio frequency, optical, and microelectronic solutions; defense and aerospace products; and cloud-based manufacturing execution software. It offers its products and services primarily to original equipment manufacturers in the industrial, medical, defense and aerospace, automotive, communications networks, and cloud solutions industries. Sanmina Corporation was founded in 1980 and is headquartered in San Jose, California.
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 presents a strong financial profile with impressive revenue growth and profitability, underpinned by a robust balance sheet with low leverage. The company's ability to generate solid cash flows further enhances its financial stability and growth potential. While the equity position is strong, there is room for improving return on equity to maximize shareholder value. Overall, the financial statements reflect a well-managed company with a positive outlook.Income Statement
Sanmina-Sci demonstrates strong financial performance with consistent revenue growth, as indicated by a TTM revenue increase of 3.7% from the previous annual report. The company maintains a solid gross profit margin of 8.5% and a net profit margin of 3.1%, reflecting effective cost control and operational efficiency. The EBIT margin of 4.5% and EBITDA margin of 5.8% are competitive for the industry, showcasing profitability. Overall, the income statement highlights robust growth and profitability trends.85
Very Positive
Balance Sheet
Sanmina-Sci has a strong equity position, with a debt-to-equity ratio of 0.07, indicating low leverage and financial stability. The return on equity (ROE) is 5.4%, showing moderate profitability relative to shareholder equity. The equity ratio of 89.9% suggests a solid financial foundation with substantial shareholder equity relative to total assets. The balance sheet reflects a strong financial structure with low risk from debt but potential for improved ROE.79
Positive
Cash Flow
The company exhibits positive cash flow dynamics, with a healthy free cash flow growth rate of 17.7% over the previous annual period. The operating cash flow to net income ratio of 1.5 indicates strong cash generation from operations, while the free cash flow to net income ratio of 1.1 confirms efficient conversion of earnings into cash. Overall, cash flow statements show the company's ability to generate cash, supporting future growth and stability.82
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.85B | 7.57B | 8.94B | 7.89B | 6.76B | 6.96B | Gross Profit |
| 668.98M | 640.43M | 743.21M | 640.51M | 551.80M | 525.71M | EBIT |
| 353.98M | 335.49M | 455.66M | 367.79M | 281.30M | 227.69M | EBITDA |
| 482.12M | 469.14M | 579.95M | 463.08M | 380.65M | 366.75M | Net Income Common Stockholders |
| 242.19M | 222.54M | 309.97M | 240.38M | 249.55M | 133.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 647.14M | 625.86M | 667.57M | 529.86M | 650.03M | 480.53M | Total Assets |
| 4.97B | 4.82B | 4.87B | 4.86B | 4.21B | 3.77B | Total Debt |
| 308.89M | 317.32M | 338.27M | 346.74M | 330.32M | 348.00M | Net Debt |
| -338.25M | -308.54M | -329.30M | -183.12M | -319.70M | -132.53M | Total Liabilities |
| 2.57B | 2.46B | 2.56B | 3.00B | 2.33B | 2.14B | Stockholders Equity |
| 2.22B | 2.20B | 2.32B | 1.86B | 1.88B | 1.63B |
| Cash Flow | Free Cash Flow | ||||
| 269.50M | 228.99M | 45.21M | 200.64M | 266.13M | 236.15M | Operating Cash Flow |
| 362.67M | 340.22M | 235.17M | 330.85M | 338.34M | 300.56M | Investing Cash Flow |
| -62.17M | -114.40M | -192.46M | -132.21M | -91.33M | -64.41M | Financing Cash Flow |
| -266.27M | -269.71M | 94.50M | -314.30M | -77.32M | -210.28M |
Sanmina-Sci Technical Analysis
Positive
81.37
Price Trends
77.38
Positive
79.76
Positive
75.75
Positive
Market Momentum
1.99
Negative
62.16
Neutral
79.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SANM, the sentiment is Positive. The current price of 81.37 is above the 20-day moving average (MA) of 80.13, above the 50-day MA of 77.38, and above the 200-day MA of 75.75, indicating a bullish trend. The MACD of 1.99 indicates Negative momentum. The RSI at 62.16 is Neutral, neither overbought nor oversold. The STOCH value of 79.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.52B | 19.57 | 11.03% | ― | -1.50% | 1.84% | |
75 Outperform | $3.64B | 26.10 | 10.93% | ― | -0.69% | 42.26% | |
75 Outperform | $3.89B | 28.22 | 16.73% | ― | 14.93% | 12.89% | |
74 Outperform | $4.74B | 40.22 | 9.66% | 0.17% | 8.40% | 20.03% | |
72 Outperform | $6.08B | 27.02 | 9.50% | 0.97% | -1.14% | ― | |
64 Neutral | $5.30B | 46.18 | 8.02% | 0.98% | 8.56% | 18.99% | |
60 Neutral | $11.59B | 10.39 | -7.23% | 2.94% | 7.46% | -10.76% |
* Technology Sector Average
Performance Comparison
SANM
Sanmina-Sci
84.56
17.52
26.13%
CGNX
Cognex
30.99
-17.09
-35.54%
ESE
Esco Technologies
183.56
73.48
66.75%
MKSI
MKS Instruments
88.46
-43.15
-32.79%
OSIS
OSI Systems
232.00
91.43
65.04%
PLXS
Plexus
134.28
23.98
21.74%
Sanmina-Sci Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q2-2025)
| % Change Since: 0.79%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Positive
Sanmina's earnings call presented a generally positive outlook with strong revenue growth, improved EPS, and a solid balance sheet. However, challenges such as tariff uncertainties, increased operating expenses, and program delays were noted. Despite these challenges, the company remains optimistic about future growth and is making strategic investments to support long-term objectives.Q2-2025 Updates
Positive Updates
Solid Revenue Growth
Sanmina reported revenue of $1.98 billion for the second quarter of fiscal year 2025, which was an 8.1% increase compared to the same period a year ago. This growth was primarily driven by advances in Communication Networks and Cloud Infrastructure end markets.
Strong Non-GAAP EPS Performance
The company achieved a non-GAAP EPS of $1.41, surpassing the outlook and marking a 7.8% increase compared to the previous year.
Healthy Balance Sheet
Sanmina maintained a strong balance sheet with $647 million in cash and cash equivalents and no outstanding borrowings on its $800 million revolver, providing substantial liquidity of approximately $1.5 billion.
Robust Segment Performance
IMS revenue increased by 9.8% year-over-year, while CPS revenue was up 3.3%. The CPS segment saw a 100 basis points improvement in gross margin, driven by favorable mix and operational efficiencies.
Positive Outlook for Key Markets
Sanmina projects revenue to grow between 6.0% and 8.0% on a full-year basis, with Communication Networks and Cloud Infrastructure showing strong demand and AI driving technology advancements.
Negative Updates
Tariff Uncertainty
The company faces ongoing uncertainty regarding tariffs, which could impact customer demand and require adjustments to the manufacturing footprint.
Increased Operating Expenses
Non-GAAP operating expenses were above the outlook at $70.7 million due to targeted investments aimed at driving future growth.
Program Delays
A major program was pushed out for redesign, affecting the revenue forecast for the upcoming quarters.
Company Guidance
During Sanmina's second quarter fiscal 2025 earnings call, the company provided detailed guidance highlighting its performance and outlook. Sanmina reported solid revenue of $1.98 billion, up 8.1% year-over-year, and a non-GAAP EPS of $1.41, which exceeded their outlook. The company achieved a non-GAAP gross margin of 9.1% and an operating margin of 5.6%, both towards the high end of their projections. Cash flow from operations was $157 million, contributing to $221 million for the first half of the fiscal year. With a strong balance sheet, including $647 million in cash and no outstanding borrowings on their $800 million revolver, Sanmina expects third-quarter revenue between $1.925 billion and $2.025 billion, and non-GAAP EPS between $1.35 and $1.45. The company continues to focus on growth and margin expansion, expecting full-year revenue growth between 6.0% and 8.0%.Sanmina-Sci Corporate Events
Executive/Board ChangesShareholder Meetings
Sanmina-Sci Appoints Michael Loparco to Board
Neutral
Mar 14, 2025
On March 10, 2025, Sanmina Corporation appointed Michael J. Loparco to its Board of Directors. Loparco, with over 25 years of experience in global manufacturing and leadership roles at Symbotic Inc. and Jabil Inc., is expected to bring valuable insights to Sanmina’s operations. Additionally, the company’s stockholders approved an amendment to the 2019 Equity Incentive Plan to reserve an additional 1,000,000 shares of Common Stock, which aims to enhance the company’s incentive structures for eligible individuals.
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.