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Sanmina-Sci Corp. (SANM)
NASDAQ:SANM

Sanmina-Sci (SANM) AI Stock Analysis

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Sanmina-Sci

(NASDAQ:SANM)

Rating:79Outperform
Price Target:
$93.00
▲(5.72%Upside)
Sanmina-Sci is well-positioned with a strong financial foundation, robust revenue growth, and strategic acquisitions enhancing its market standing. While technical analysis shows short- to mid-term upward momentum, valuation remains balanced. The positive earnings call and strategic acquisition underscore a focus on growth and margin expansion, positioning the stock for solid performance despite some operational challenges.
Positive Factors
Acquisition and Expansion
SANM's acquisition of ZT's manufacturing assets is expected to increase SANM’s scale and revenue from higher margin cloud/AI sectors.
Capital Allocation
The board authorized a new $300 million share buyback.
Financial Performance
Sanmina reported a strong F2Q with revenue at the high end of guidance, and GM and EPS above guidance.
Negative Factors
Macroeconomic Conditions
Positives are balanced by ongoing weak macroeconomic conditions and the need for program ramps to materialize and get to scale.
Operating Environment
The operating environment remains tough, and weak end markets could lead to program pushouts.
Revenue 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 is a leading global provider of integrated manufacturing solutions, known primarily for its expertise in producing complex electronic and mechanical products. Serving a diverse range of sectors including communications, computing, defense, aerospace, industrial, medical, and automotive industries, Sanmina offers a comprehensive suite of services from design and engineering to final assembly and testing. The company is headquartered in San Jose, California, and operates a network of facilities strategically located worldwide to support its global customer base.
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:Apr 28, 2025
(Q2-2025)
|
% Change Since: 8.97%|
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 Financial Statement Overview

Summary
Sanmina-Sci demonstrates strong financial performance with consistent revenue growth and profitability. The company maintains a solid gross profit margin and a strong equity position with low leverage, indicating financial stability. Cash flow generation is robust, supporting future growth and stability. However, there is room for improving return on equity to maximize shareholder value.
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.
Breakdown
TTMSep 2024Sep 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.85B7.57B8.94B7.89B6.76B6.96B
Gross Profit
668.98M640.43M743.21M640.51M551.80M525.71M
EBIT
353.98M335.49M455.66M367.79M281.30M227.69M
EBITDA
482.12M469.14M579.95M463.08M380.65M366.75M
Net Income Common Stockholders
242.19M222.54M309.97M240.38M249.55M133.17M
Balance SheetCash, Cash Equivalents and Short-Term Investments
647.14M625.86M667.57M529.86M650.03M480.53M
Total Assets
4.97B4.82B4.87B4.86B4.21B3.77B
Total Debt
308.89M317.32M338.27M346.74M330.32M348.00M
Net Debt
-338.25M-308.54M-329.30M-183.12M-319.70M-132.53M
Total Liabilities
2.57B2.46B2.56B3.00B2.33B2.14B
Stockholders Equity
2.22B2.20B2.32B1.86B1.88B1.63B
Cash FlowFree Cash Flow
269.50M228.99M45.21M200.64M266.13M236.15M
Operating Cash Flow
362.67M340.22M235.17M330.85M338.34M300.56M
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 Price87.97
Price Trends
50DMA
81.14
Positive
100DMA
81.15
Positive
200DMA
77.39
Positive
Market Momentum
MACD
1.73
Positive
RSI
59.70
Neutral
STOCH
53.15
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 87.97 is above the 20-day moving average (MA) of 85.77, above the 50-day MA of 81.14, and above the 200-day MA of 77.39, indicating a bullish trend. The MACD of 1.73 indicates Positive momentum. The RSI at 59.70 is Neutral, neither overbought nor oversold. The STOCH value of 53.15 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$4.62B19.9811.03%-1.50%1.84%
75
Outperform
$3.85B27.9216.73%14.93%12.89%
75
Outperform
$3.55B25.4610.93%-0.69%42.26%
ESESE
74
Outperform
$4.73B40.149.66%0.17%8.40%20.03%
74
Outperform
$6.28B27.909.50%0.98%-1.14%
70
Neutral
$5.06B44.098.02%1.06%8.56%18.99%
62
Neutral
$11.97B10.29-7.47%2.99%7.32%-8.06%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SANM
Sanmina-Sci
87.97
20.37
30.13%
CGNX
Cognex
30.54
-15.83
-34.14%
ESE
Esco Technologies
183.22
78.94
75.70%
MKSI
MKS
93.61
-42.39
-31.17%
OSIS
OSI Systems
234.83
98.93
72.80%
PLXS
Plexus
130.96
27.86
27.02%

Sanmina-Sci Corporate Events

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.