SMART Global Holdings (NasdaqGS:SGH) - Share price, News & Analysis

SGH fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	4/6
Financial Health	6/6
Dividends	0/6

SGH Stock Overview

SMART Global Holdings, Inc. designs and manufactures specialty solutions for the computing, memory, and LED markets in the United states, Brazil, China, Europe, and internationally.

Rewards

Trading at 84% below our estimate of its fair value

Earnings are forecast to grow 74.22% per year

Earnings grew by 123.8% over the past year

Risk Analysis

Large one-off items impacting financial results

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

SMART Global Holdings Competitors

NVIDIA

NasdaqGS:NVDA

US$425.1b

Intel

NasdaqGS:INTC

US$172.5b

QUALCOMM

NasdaqGS:QCOM

US$147.0b

Micron Technology

NasdaqGS:MU

US$75.8b

Price History & Performance

Summary of all time highs, changes and price drops for SMART Global Holdings
Historical stock prices
Current Share Price	US$23.20
52 Week High	US$37.25
52 Week Low	US$20.36
Beta	1.17
1 Month Change	-0.98%
3 Month Change	-18.22%
1 Year Change	1.16%
3 Year Change	165.90%
5 Year Change	254.20%
Change since IPO	244.98%

Recent News & Updates

May 20

We Think SMART Global Holdings (NASDAQ:SGH) Can Manage Its Debt With Ease

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

	SGH	US Semiconductor	US Market
7D	0.2%	-0.8%	1.0%
1Y	1.2%	-4.5%	-15.1%

Return vs Industry: SGH exceeded the US Semiconductor industry which returned -6.5% over the past year.

Return vs Market: SGH exceeded the US Market which returned -13.2% over the past year.

Price Volatility

Is SGH's price volatile compared to industry and market?
SGH volatility
SGH Average Weekly Movement	6.1%
Semiconductor Industry Average Movement	8.6%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: SGH is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: SGH's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1988	3,900	Mark Adams	https://www.smartm.com

SMART Global Holdings, Inc. designs and manufactures specialty solutions for the computing, memory, and LED markets in the United states, Brazil, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platforms Solutions, and LED Solutions segments. The company offers dynamic random access memory modules for desktops, notebooks, servers, and smartphones; embedded and removable flash memory products; and flash component products.

SMART Global Holdings Fundamentals Summary

How do SMART Global Holdings's earnings and revenue compare to its market cap?
SGH fundamental statistics
Market Cap	US$1.15b
Earnings (TTM)	US$35.92m
Revenue (TTM)	US$1.82b

32.1x

P/E Ratio

0.6x

P/S Ratio

Is SGH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SGH income statement (TTM)
Revenue	US$1.82b
Cost of Revenue	US$1.38b
Gross Profit	US$444.29m
Other Expenses	US$408.36m
Earnings	US$35.92m

Last Reported Earnings

Feb 25, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.72
Gross Margin	24.35%
Net Profit Margin	1.97%
Debt/Equity Ratio	138.2%

How did SGH perform over the long term?

See historical performance and comparison

Valuation

Is SMART Global Holdings undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SGH ($23.2) is trading below our estimate of fair value ($145.37)

Significantly Below Fair Value: SGH is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: SGH is poor value based on its Price-To-Earnings Ratio (32.1x) compared to the US Semiconductor industry average (19.6x).

PE vs Market: SGH is poor value based on its Price-To-Earnings Ratio (32.1x) compared to the US market (14.9x).

Price to Earnings Growth Ratio

PEG Ratio: SGH is good value based on its PEG Ratio (0.4x)

Price to Book Ratio

PB vs Industry: SGH's Price-To-Book Ratio (3.3x) is in line with the US Semiconductor industry average.

Future Growth

How is SMART Global Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

74.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGH's forecast earnings growth (74.2% per year) is above the savings rate (1.9%).

Earnings vs Market: SGH's earnings (74.2% per year) are forecast to grow faster than the US market (12.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SGH's revenue (5.8% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: SGH's revenue (5.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SGH's Return on Equity is forecast to be high in 3 years time (38.6%)

Past Performance

How has SMART Global Holdings performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-11.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SGH has a large one-off loss of $88.0M impacting its February 25 2022 financial results.

Growing Profit Margin: SGH's current net profit margins (2%) are higher than last year (1.4%).

Past Earnings Growth Analysis

Earnings Trend: SGH has become profitable over the past 5 years, growing earnings by -11% per year.

Accelerating Growth: SGH's earnings growth over the past year (123.8%) exceeds its 5-year average (-11% per year).

Earnings vs Industry: SGH earnings growth over the past year (123.8%) exceeded the Semiconductor industry 70.4%.

Return on Equity

High ROE: SGH's Return on Equity (10.8%) is considered low.

Financial Health

How is SMART Global Holdings's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SGH's short term assets ($1.1B) exceed its short term liabilities ($533.8M).

Long Term Liabilities: SGH's short term assets ($1.1B) exceed its long term liabilities ($619.8M).

Debt to Equity History and Analysis

Debt Level: SGH's net debt to equity ratio (35.1%) is considered satisfactory.

Reducing Debt: SGH's debt to equity ratio has reduced from 1030.1% to 138.2% over the past 5 years.

Debt Coverage: SGH's debt is well covered by operating cash flow (29.5%).

Interest Coverage: SGH's interest payments on its debt are well covered by EBIT (8.9x coverage).

Balance Sheet

Dividend

What is SMART Global Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate SGH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SGH's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SGH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SGH's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SGH has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Mark Adams (57 yo)

1.75yrs

Tenure

US$14,810,329

Compensation

Mr. Mark W. Adams has been President and Chief Executive Officer of SMART Global Holdings, Inc. since August 31, 2020 and also its Director since September 30, 2020. Mr. Adams served as the Chief Executive...

CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD14.81M) is above average for companies of similar size in the US market ($USD3.95M).

Compensation vs Earnings: Insufficient data to compare Mark's compensation with company performance.

Leadership Team

Experienced Management: SGH's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: SGH's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SGH insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/25 00:00
End of Day Share Price	2022/05/25 00:00
Earnings	2022/02/25
Annual Earnings	2021/08/27