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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
▲(14.62%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 Environment
Positives, like the communications end market coming out of an inventory correction, are balanced by an ongoing weak macroeconomic environment.
Program Ramps
Program ramps are needed to materialize and get to scale, which presents a challenge in achieving the expected benefits.
ZT Transition Period
ZT is going through a transition period, and the assets are expected to generate less revenue than previously, which could be a concern until AMD accelerator revenues increase.

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 makes money through its contract manufacturing services, which include offering end-to-end supply chain solutions. The company generates revenue by providing design, engineering, and manufacturing services for complex and advanced electronic products. Its revenue streams are primarily derived from production volumes of these products, often under long-term contracts with key customers across various industries. Sanmina's earnings are bolstered by its ability to offer vertically integrated solutions, which help customers reduce costs and time to market. Key factors contributing to its revenue include its strategic partnerships with leading technology companies and its ability to adapt to industry trends, such as the growing demand for electronic hardware in emerging sectors like 5G technology and electric vehicles.

Sanmina-Sci Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q3-2025)
|
% Change Since: 18.00%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and strategic growth initiatives, including impressive revenue growth and improved margins. The strategic acquisition of ZT Systems is expected to bolster future growth. However, challenges related to increased operating expenses, softer demand in the automotive segment, and geopolitical uncertainties were noted. Overall, the positives significantly outweigh the negatives.
Q3-2025 Updates
Positive Updates
Strong Financial Performance
Sanmina reported third-quarter revenue of $2.04 billion, representing an increase of 10.9% year-over-year. Non-GAAP diluted earnings per share increased by 22.8% compared to the same period last year.
Improved Margins
Non-GAAP gross margin improved by 60 basis points to 9.1%, and non-GAAP operating margin improved by 40 basis points to 5.7% year-over-year.
Cash Flow and Liquidity
The company generated $201 million in cash flow from operations for the third quarter, leading to a total of $422 million for the first nine months of fiscal year 2025. Sanmina has a strong liquidity position with approximately $1.7 billion.
Communication Networks and Cloud Infrastructure Growth
This segment grew by 19.1% year-over-year, driven by strong demand for high-performance routers, switches, and optical network systems.
Strategic Acquisition of ZT Systems
Sanmina is on track to acquire ZT Systems, which is expected to add $5 billion to $6 billion of annual net revenue and double Sanmina's net revenue within the next three years.
Strong Balance Sheet
Sanmina maintains a robust balance sheet with a net positive cash position and a gross leverage ratio of 0.38x, positioning the company to invest in strategic initiatives.
Negative Updates
Increased Operating Expenses
Non-GAAP operating expenses were slightly above the outlook at $70.3 million, driven by continued strategic investments.
Softness in Automotive and Transportation Segment
The automotive and transportation segment experienced slower demand, impacting short-term growth.
Tariffs and Geopolitical Uncertainties
Market uncertainties stemming from tariffs and geopolitical factors continue to pose a challenge, impacting the company's strategic planning and customer decision-making.
Company Guidance
During Sanmina's Third Quarter Fiscal 2025 Earnings Conference Call, the company provided guidance indicating strong financial performance. They reported solid revenue of $2.04 billion, a year-over-year increase of 10.9%, driven by broad-based demand, particularly in the communications networks and cloud infrastructure markets. The non-GAAP gross margin was 9.1%, and non-GAAP diluted earnings per share (EPS) reached $1.53, representing a 22.8% increase from the previous year. The non-GAAP operating margin was 5.7%, at the high end of their outlook. For the nine months of fiscal year 2025, revenue increased by 8.7%, with non-GAAP EPS up by 13.5%. Looking ahead to the fourth quarter, Sanmina expects revenue between $2.0 billion and $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 highlighted their strategic acquisition of ZT Systems, expected to add $5 billion to $6 billion in annual net revenue, which will double Sanmina's net revenue within three years.

Sanmina-Sci Financial Statement Overview

Summary
Sanmina-Sci's financial performance is robust, marked by consistent revenue growth and strong profitability metrics. The company's low leverage and strong cash flows underpin its financial stability, though there is room for improved 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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.57B8.94B7.89B6.76B6.96B
Gross Profit640.43M743.21M640.51M551.80M525.71M
EBITDA469.14M579.95M463.08M380.65M366.75M
Net Income222.54M309.97M240.38M249.55M133.17M
Balance Sheet
Total Assets4.82B4.87B4.84B4.21B3.77B
Cash, Cash Equivalents and Short-Term Investments625.86M667.57M529.86M650.03M480.53M
Total Debt384.11M421.28M412.00M386.13M401.67M
Total Liabilities2.46B2.56B3.02B2.33B2.14B
Stockholders Equity2.20B2.17B1.82B1.88B1.63B
Cash Flow
Free Cash Flow228.99M45.21M200.64M266.13M236.15M
Operating Cash Flow340.22M235.17M330.85M338.34M300.56M
Investing Cash Flow-114.40M-192.46M-132.21M-91.33M-64.41M
Financing Cash Flow-269.71M94.50M-314.30M-77.32M-210.28M

Sanmina-Sci Technical Analysis

Technical Analysis Sentiment
Positive
Last Price116.04
Price Trends
50DMA
95.19
Positive
100DMA
86.34
Positive
200DMA
82.59
Positive
Market Momentum
MACD
4.47
Negative
RSI
68.32
Neutral
STOCH
84.41
Negative
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 116.04 is above the 20-day moving average (MA) of 104.18, above the 50-day MA of 95.19, and above the 200-day MA of 82.59, indicating a bullish trend. The MACD of 4.47 indicates Negative momentum. The RSI at 68.32 is Neutral, neither overbought nor oversold. The STOCH value of 84.41 is Negative, 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 (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$6.18B24.8411.58%5.87%20.66%
77
Outperform
$5.00B42.449.66%0.17%8.40%20.03%
75
Outperform
$3.71B26.8816.73%14.93%12.89%
72
Outperform
$3.48B21.7512.12%2.31%48.63%
71
Outperform
$5.75B50.108.10%0.77%10.14%57.53%
68
Neutral
$6.82B30.299.50%0.92%-1.14%
57
Neutral
$815.27M11.36-16.80%2.65%10.29%-42.67%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SANM
Sanmina-Sci
116.04
43.33
59.59%
CGNX
Cognex
40.77
2.03
5.24%
ESE
Esco Technologies
193.70
75.73
64.19%
MKSI
MKS
95.18
-18.60
-16.35%
OSIS
OSI Systems
221.01
76.33
52.76%
PLXS
Plexus
127.50
2.97
2.38%

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