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Acquisition Of ZT Systems Will Fuel Enduring Electronics Momentum

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AnalystConsensusTarget
AnalystConsensusTarget
Not Invested
Published 03 Sep 2024

Update shared on31 Jul 2025

Previous
AnalystConsensusTarget's Fair Value
US$114.50
1.9% overvalued intrinsic discount
31 Jul
US$116.69
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1Y
77.4%
7D
18.7%

Analysts see Sanmina’s recent acquisition and recovery in its communications end market boosting scale and margins, particularly in cloud/AI, but remain cautious due to macroeconomic headwinds and the importance of successful new program execution, resulting in an unchanged consensus price target of $114.50.


Analyst Commentary


  • Strategic acquisition of ZT Systems’ data center infrastructure manufacturing business is expected to increase Sanmina’s scale and cloud/AI revenues.
  • Communications end market is recovering from an inventory correction, improving near-term prospects.
  • Margins are projected to benefit from a stronger revenue mix focused on higher-margin cloud and AI business.
  • Ongoing macroeconomic headwinds and tough operating environment temper enthusiasm, with success dependent on new program ramps reaching meaningful scale in H2.
  • Bullish analysts apply a slightly higher valuation multiple based on increased confidence in Sanmina’s growth initiatives within cloud/AI segments.

What's in the News


  • Sanmina repurchased 197,018 shares for $13.38 million, completing the repurchase of 801,093 shares for $60.8 million under its 2025 buyback program.
  • Provided Q4 fiscal 2025 guidance: revenue expected between $2.0 billion to $2.1 billion and GAAP diluted EPS between $1.21 to $1.31.
  • Added to multiple Russell growth and small cap indices, including Russell 2000, 2500, 3000, and their respective growth and defensive variants.
  • Amended bylaws to reduce the ownership threshold for calling a special meeting from 50% to 25%, instituted a one-year continuous holding period, and clarified related procedures.
  • Participated in an M&A call with Advanced Micro Devices, Inc.

Valuation Changes


Summary of Valuation Changes for Sanmina

  • The Consensus Analyst Price Target remained effectively unchanged, at $114.50.
  • The Discount Rate for Sanmina remained effectively unchanged, moving only marginally from 7.79% to 7.77%.
  • The Future P/E for Sanmina remained effectively unchanged, moving only marginally from 18.71x to 18.69x.

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.