Sanmina (SANM): Evaluating Valuation After Q4 Results and Upbeat Revenue Guidance

Sanmina (SANM) has just released its fourth quarter and full year earnings results, along with new guidance for the current quarter. These two major updates are sure to catch investors’ attention.

See our latest analysis for Sanmina.

Sanmina’s latest earnings and upbeat revenue guidance have reignited investor confidence, fueling a huge run. The stock is up 24.1% over the past month and has delivered a remarkable 108.4% total shareholder return in the last year, suggesting momentum remains strong.

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With the stock on a hot streak and new guidance raising expectations, the key question is whether Sanmina still offers untapped value at these levels, or if the market has already priced in its next stage of growth.

Most Popular Narrative: 15.6% Undervalued

Sanmina’s narrative fair value estimate stands out above its recent closing price of $160.37, signaling a sizable upside according to the prevailing consensus. This creates a compelling look at the expectations powering the company’s valuation narrative.

Expansion of capabilities and a strong financial position enable sustained margin improvement, operational efficiency, and long-term earnings growth across diverse markets. Broad-based demand for complex electronics manufacturing remains strong across end-markets, especially in communications networks, cloud infrastructure, medical, defense, aerospace, and industrial segments. These markets favor sophisticated EMS providers like Sanmina and are expected to support long-term revenue growth and earnings stability.

Read the complete narrative.

Want to know what financial ingredients are fueling this potential? One key forecast blends accelerating profit margins with robust revenue expansion across fast-changing markets. Interested in the bold growth bets underlying this narrative’s upside? Unlock the full story to see what could propel Sanmina to a whole new level.

Result: Fair Value of $190 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, uncertainties around integrating the ZT acquisition and the impact of macroeconomic shifts could challenge Sanmina’s ambitious growth narrative in the future.

Find out about the key risks to this Sanmina narrative.

Another View: Discounted Cash Flow Tells a Different Story

Taking a fresh look using our SWS DCF model, the fair value estimate comes out far below Sanmina’s current market price. This suggests the shares may be significantly overvalued based on long-term cash flow assumptions. This result presents a clear contrast to expectations built around narrative and analyst targets. Which approach will prove more accurate as events unfold?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sanmina for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 886 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Sanmina Narrative

Keep in mind, these conclusions are just one way to interpret the story. If you think differently or want your own perspective reflected, building a custom narrative takes just a few minutes, so why not Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Sanmina.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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