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Sanmina-sci (SANM)
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Sanmina-Sci (SANM) AI Stock Analysis

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SANM

Sanmina-Sci

(NASDAQ:SANM)

Rating:80Outperform
Price Target:
$133.00
▲(15.17% Upside)
Sanmina's strong financial performance and strategic growth initiatives, including acquisitions, drive a positive outlook. While technical indicators show strong momentum, valuation concerns and potential market volatility should be monitored. The overall score reflects a well-positioned company with strategic growth opportunities.
Positive Factors
Financial Performance
Sanmina reported a strong F2Q with revenue at the high end of guidance, and GM and EPS above guidance.
Partnership with AMD
This deal establishes a commercial partnership with AMD to accelerate the deployment of AMD racks and AI solutions.
Strategic Acquisition
The acquisition of ZT systems is seen as strategic and will increase Sanmina’s scale and revenues from cloud and AI sectors.
Negative Factors
Macroeconomic Conditions
Positives, like the communications end market coming out of an inventory correction, are balanced by an ongoing weak macroeconomic environment.
Program Ramp Challenges
Program ramps are needed to materialize and get to scale, which presents a challenge in achieving the expected benefits.
Transition Period Concerns
ZT is going through a transition period, with expected revenues from the acquired assets being lower than past figures.

Sanmina-Sci (SANM) vs. SPDR S&P 500 ETF (SPY)

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 generates revenue primarily through its manufacturing services, which include printed circuit board assembly, system integration, and supply chain management. The company operates on a contract manufacturing model, where it partners with original equipment manufacturers (OEMs) to produce their electronic products. Key revenue streams include the sale of manufacturing services, logistics and supply chain solutions, and value-added services such as engineering and design support. Sanmina benefits from long-term contracts with major clients in various industries, which provides a stable revenue base. Additionally, the company has strategic partnerships with technology leaders that enhance its market position and contribute to its earnings through collaborative projects and innovations.

Sanmina-Sci Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q3-2025)
|
% Change Since: 17.43%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
Sanmina's earnings call demonstrated strong financial performance and strategic advancements, including significant revenue and EPS growth, robust cash flow, and a promising acquisition poised to enhance future growth. However, challenges such as increased operating expenses, segment-specific demand softness, and geopolitical uncertainties were acknowledged.
Q3-2025 Updates
Positive Updates
Revenue and EPS Growth
Sanmina reported solid revenue of $2.04 billion, representing a 10.9% increase year-over-year, and non-GAAP EPS of $1.53, which is a 22.8% increase versus the same period last year.
CPS Segment Performance
CPS revenue increased by 8.8% year-over-year, with a non-GAAP gross margin of 14.7%, a 320 basis point improvement year-over-year, driven by higher revenue, favorable mix, and operational efficiencies.
Strong Cash Flow
Cash flow from operations for the third quarter was $201 million, with free cash flow of $168 million, allowing for continued investments and shareholder returns.
Strategic Acquisition
Sanmina is on track to acquire ZT Systems, expected to add $5 billion to $6 billion of annual net revenue and double Sanmina's net revenue over the next 3 years, positioning the company in the data center and AI infrastructure end market.
Solid Balance Sheet
Sanmina maintained a strong balance sheet with cash and cash equivalents of $798 million, no outstanding borrowings, and a non-GAAP pretax ROIC of 24.8%.
Negative Updates
Slight Increase in Operating Expenses
Non-GAAP operating expenses totaled $70.3 million, slightly above the company's outlook, reflecting continued strategic investments.
Softness in Automotive and Transportation Segment
The automotive segment experienced slower demand, with expectations to grow again in fiscal year '26.
Geopolitical and Tariff Uncertainties
Market uncertainties stemming from tariffs and the geopolitical landscape were mentioned as potential headwinds.
Company Guidance
During Sanmina's third quarter fiscal 2025 earnings call, the company reported a solid financial performance, exceeding their outlook with revenue reaching $2.04 billion and a non-GAAP EPS of $1.53 per share. The non-GAAP gross margin was reported at 9.1%, while the non-GAAP operating margin stood at 5.7%. The company achieved a 10.9% year-over-year revenue increase, driven by demand across all end markets, especially in communications networks and cloud infrastructure. Non-GAAP operating income was $115.7 million, with non-GAAP operating expenses at $70.3 million. The company generated $201 million in cash flow from operations in the quarter and $422 million for the first nine months of the fiscal year. They also reported strong liquidity, with $798 million in cash and cash equivalents and no outstanding borrowings on their $800 million revolver. Furthermore, Sanmina provided guidance for the fourth quarter, expecting revenue between $2.0 billion to $2.1 billion, non-GAAP gross margin between 8.7% and 9.2%, and non-GAAP EPS in the range of $1.52 to $1.62. They also updated on their acquisition of ZT Systems, which is expected to add $5 billion to $6 billion of annual revenue and is anticipated to double Sanmina's net revenue within three years.

Sanmina-Sci Financial Statement Overview

Summary
Sanmina-Sci demonstrates robust financial performance with consistent revenue growth, a solid gross profit margin, and effective cost control. The strong equity position and cash flow dynamics indicate financial stability, although there's room for improvement in return on equity.
Income Statement
85
Very Positive
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.
Balance Sheet
79
Positive
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.
Cash Flow
82
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.85B7.57B8.94B7.89B6.76B6.96B
Gross Profit668.98M640.43M743.21M622.21M526.44M517.16M
EBITDA482.12M469.14M579.95M463.08M436.21M343.88M
Net Income242.19M222.54M309.97M240.38M249.55M133.17M
Balance Sheet
Total Assets4.97B4.82B4.87B4.84B4.21B3.77B
Cash, Cash Equivalents and Short-Term Investments647.14M625.86M667.57M529.86M650.03M480.53M
Total Debt308.89M384.11M421.28M412.00M386.13M401.67M
Total Liabilities2.57B2.46B2.56B3.02B2.33B2.14B
Stockholders Equity2.22B2.20B2.17B1.82B1.88B1.63B
Cash Flow
Free Cash Flow269.50M228.99M45.21M200.64M266.13M236.15M
Operating Cash Flow362.67M340.22M235.17M330.85M338.34M300.56M
Investing Cash Flow-62.17M-114.40M-192.46M-132.21M-91.33M-64.41M
Financing Cash Flow-266.27M-269.71M94.50M-314.30M-77.32M-210.28M

Sanmina-Sci Technical Analysis

Technical Analysis Sentiment
Positive
Last Price115.48
Price Trends
50DMA
105.06
Positive
100DMA
92.71
Positive
200DMA
86.48
Positive
Market Momentum
MACD
2.63
Positive
RSI
55.08
Neutral
STOCH
21.14
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 115.48 is below the 20-day moving average (MA) of 115.83, above the 50-day MA of 105.06, and above the 200-day MA of 86.48, indicating a neutral trend. The MACD of 2.63 indicates Positive momentum. The RSI at 55.08 is Neutral, neither overbought nor oversold. The STOCH value of 21.14 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 32 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$5.92B24.7211.58%5.87%20.66%
77
Outperform
$7.29B60.748.10%0.75%10.14%57.53%
76
Outperform
$3.53B21.9012.12%2.31%48.63%
75
Outperform
$6.76B25.5911.12%0.89%4.47%2887.37%
72
Outperform
$3.81B27.1716.49%11.33%
69
Neutral
$4.88B42.599.01%0.17%10.65%15.22%
61
Neutral
$34.98B7.37-10.82%1.91%8.82%-8.66%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SANM
Sanmina-Sci
115.48
44.72
63.20%
CGNX
Cognex
44.76
5.41
13.75%
ESE
Esco Technologies
195.29
75.68
63.27%
MKSI
MKS
105.25
-15.40
-12.76%
OSIS
OSI Systems
228.70
78.70
52.47%
PLXS
Plexus
137.26
9.22
7.20%

Sanmina-Sci Corporate Events

Private Placements and FinancingM&A Transactions
Sanmina-Sci Secures $3.5 Billion Credit for Acquisition
Positive
Jul 30, 2025

On July 29, 2025, Sanmina Corporation entered into a new Credit Agreement involving a $3.5 billion senior secured credit facility to support its acquisition of ZT Group Int’l, Inc. The agreement includes a $1.5 billion revolving credit facility and a $2.0 billion term loan A facility, with the proceeds intended for financing the acquisition, refinancing existing debts, and general corporate purposes. The agreement outlines various covenants and conditions, including interest rates based on leverage ratios, and provides for asset-backed security and default provisions. This move is significant for Sanmina as it enhances its financial structure to facilitate strategic acquisitions, potentially impacting its market positioning and operational capabilities.

The most recent analyst rating on (SANM) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on Sanmina-Sci stock, see the SANM Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Sanmina-Sci Updates Bylaws for Stockholder Meetings
Neutral
Jun 23, 2025

On June 19, 2025, Sanmina Corporation’s board of directors approved amendments to the company’s bylaws, which became effective immediately. These changes reduce the ownership threshold required to call a special meeting of stockholders from fifty percent to twenty-five percent, establish a one-year holding period for stockholders to call such meetings, and update procedural mechanics, reflecting a more modern and clarified governance structure.

The most recent analyst rating on (SANM) stock is a Hold with a $84.00 price target. To see the full list of analyst forecasts on Sanmina-Sci stock, see the SANM Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Sanmina-Sci Acquires ZT Systems’ Infrastructure Business
Positive
May 19, 2025

On May 18, 2025, Sanmina Corporation announced a definitive agreement to acquire the data center infrastructure manufacturing business of ZT Systems from AMD for $2.55 billion in cash and equity, with an additional $450 million contingent on future performance. This strategic acquisition is expected to enhance Sanmina’s position in the fast-growing Cloud and AI infrastructure market, doubling its revenue scale in three years and being accretive to non-GAAP EPS in the first year post-close. The acquisition will also strengthen Sanmina’s relationships with hyperscaler customers and expand its manufacturing capabilities in the U.S. and Europe, positioning it as a leading end-to-end manufacturing partner for mission-critical technologies.

The most recent analyst rating on (SANM) stock is a Hold with a $84.00 price target. To see the full list of analyst forecasts on Sanmina-Sci stock, see the SANM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 31, 2025