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SANM

Sanmina NasdaqGS:SANM Stock Report

Last Price

US$46.08

Market Cap

US$2.7b

7D

1.6%

1Y

17.6%

Updated

30 Sep, 2022

Data

Company Financials +
SANM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance2/6
Financial Health6/6
Dividends0/6

SANM Stock Overview

Sanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide.

Sanmina Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Sanmina
Historical stock prices
Current Share PriceUS$46.08
52 Week HighUS$52.14
52 Week LowUS$35.36
Beta0.96
1 Month Change-5.03%
3 Month Change13.33%
1 Year Change17.61%
3 Year Change47.88%
5 Year Change19.38%
Change since IPO1,043.03%

Recent News & Updates

Sep 27
Returns At Sanmina (NASDAQ:SANM) Are On The Way Up

Returns At Sanmina (NASDAQ:SANM) Are On The Way Up

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Amongst...

Aug 28

Sanmina Corporation: An Undervalued And Undercovered Gem

Summary Sanmina Corporation is trading at discount relative to its peers despite an around 20% YTD gain because of its consistent financial outperformance. The company has ample growth prospects as it continues to invest in diversifying its revenue streams and optimizing operational leverage. The stock is a buy because it's relatively cheap compared to its peers, has a great balance sheet, and is set to outperform its annual guidance in the next quarter. Investment thesis Tech stocks generally trade at a premium as they bear higher risks than the market. These stocks underperformed the market in 2022 because of the economic downturn, which led to investors dumping them due to this higher risk. However, tech stocks have started outperforming the market again as investors load up on these stocks, now trading at a discount because of the recent price plummet, in hopes of a strong rebound when the macroeconomic headwinds subside. Sanmina Corporation (SANM), a direct competitor of my recently covered stock, Fabrinet (FN), has outperformed the market and Fabrinet by a wide margin in the previous years, gaining over 22.5% YTD despite the macroeconomic turmoil. SANM data by YCharts The company’s financial position is strong, with a total debt to equity ratio of 20.56%, strong liquidity of $1.3 billion, including almost $500 million in cash, a current ratio of 1.58x, and debt to FCF of almost 17x. Similarly, its financial performance has also been strong, outperforming its guidance in the MRQ, with its net income and DEPS growing at a 3-year CAGR of 26.5% and 30.1%. Sanmina Corp. Q3 FY22 Presentation This indicates the resiliency of the company throughout the post-pandemic turbulent period. In the future, this is crucial because companies will need to navigate through the recession and come out victorious on the other end to deliver strong investor returns. With the growing need for global Engineering and IT solutions, resilient stocks like SANM, which has a 60-month beta of 0.99x and is trading at a discount, offer a strong investment opportunity to long-term investors. The Company SANM is a global provider of integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide, serving the automotive, industrial, medical, defense and aerospace, communications networks, and cloud infrastructure solutions. Sanmina Corp. generates revenue through 2 segments, with the Integrated Manufacturing Solutions segment accounting for 80% of the revenue for the last 9 months and the Components, Products, and Services segment accounting for 20%. Each segment reported YoY revenue growth of 15.4% and 5.5% in the same period. Sanmina Corp. Q3 FY22 Presentation 80% of SANM's sales are generated from non-US manufactured products because its clients manufacture them in low-cost regions like Asia, Latin America, and Eastern Europe. 60% of its revenue in H1 was generated from industrial, medical, defense, and automotive end markets, with the remainder from communications networks and cloud infrastructure. Sanmina Corp. Q3 FY22 Presentation The company’s net revenue depends on a small number of clients, with its ten biggest clients accounting for around half of its revenue. Alcatel-Lucent and Nokia Siemens Networks accounted for over 10% of Sanmina's net deals each in the previous 9 months. Integrated Manufacturing Solutions This segment primarily provides printed circuit board assembly and test, commonly known as PCB, the backbone of all modern-day electronic devices. In 1936 Paul Eisler recognized the hurdles of manual circuits and presented the idea of printing conductive circuits onto a non-conductive surface. Over the years, PCBs have become more and more compact with improved efficiency used in sleek mobile devices, laptops, and other electronic equipment. With a Focus on High-Speed Technologies for Telecom, SANM provides advanced PCBs, backplanes, and flex Circuits for virtually all industries. High-level assembly and test: Sanmina corporation is known for integrating multiple complex technologies, including electronics, fluidics, and motion control, into complete systems. The company also provides a wide range of complex high-level assemblies, including communications systems, power inverters, industrial control systems, semi-conductor systems, ATMs, blood analyzers, MRI machines, commercial digital printers, multimedia kiosks, and smart vending machines manufactured by Sanmina. Direct-order fulfillment: The company also offers a wide range of logistics and after-sales services, including direct order fulfillment, configuration, integration services, inventory management programs, aftermarket, and end-of-life solutions. Diversifying Revenue Streams Sanmina Corp. Q3 FY22 Presentation Sanmina provides computation, cloud storage, and telecommunication rack integration for the world’s best social media, video, and cloud storage companies. In 2016, Sanmina and Nokia joined hands to deliver a wide range of data center solutions for operators leveraging the cloud. This strategic collaboration between the two companies focused on delivering cost-effective, scalable, multivendor cloud infrastructure solutions. Similarly, in March, Sanmina agreed to engage in a Joint Venture with Reliance Industries Ltd. using its existing Indian manufacturing entity, Sanmina SCI India Pvt. Ltd., to manufacture telecommunications equipment, data center and internet, medical equipment, clean technology equipment, and other high-tech equipment. Rising popularities of modern-day advanced technologies like Artificial intelligence and Machine Learning are empowering the cloud computation market globally. Since the outbreak of COVID-19, there have been rapid advancements in cloud infrastructure technologies across developed and developing economies. According to Precedence Research, the global cloud computing market size was estimated at $380.25 billion in 2021, with North America leading the pack with 40% of the revenue share. The cloud computing market is expected to cross $1.6 trillion by 2030, with an impressive estimated CAGR of 17.43%, outpacing the overall IT sector, which is forecasted to grow at about 7.1%. Precedence Research Companies like SANM and its peers use cloud computation for business growth because of its cost-effectiveness and significant growth prospects. Its revenues from the communication networks and cloud infrastructure segment grew 6% sequentially and 14% YoY, driven by optical systems, 5G networks, and cloud infrastructure. A general idea of the growth prospects in the optical systems market can also be extracted from the Fabrinet article and the 5G market from the Nokia article, as they are closely related to SANM. The future of cloud computing is optimistic and advantageous to both the host and the client. Cloud computing is the future, and increasing demand for its solution, from individuals to multinational companies, puts SANM in favorable conditions for business growth in the upcoming years. Superb Financials The company has faced post-pandemic turbulence like the rest of the market. Still, it has successfully recouped, achieving significant sequential topline growth in the previous 3 quarters, beating the revenue and EPS estimates each time. This was driven by strong customer demand and facilitated by successfully overcoming the global supply chain challenge. Even though the company's gross margin slid by 100 basis points YoY during the same time due to inflation and pricing pressures from OEMs, it augmented its operating margin through operating leverage. This means that despite the strong macroeconomic pressure, the company has achieved a strong bottom line growth with its fully diluted Non-GAAP EPS exhibiting a 14.4% sequential and 31.3% YoY growth to $1.30 in the MRQ, beating its upper-end guidance by 13% and analyst estimates by 17%. Sanmina Corp. Q3 FY22 Presentation SANM aims to achieve a 21% YoY revenue growth in the upcoming quarter at the midpoint, generating $2 billion and a DEPS of $1.32, up 39% YoY. As per the company's annual guidance, it expects to generate $6.76 billion in revenue and $3.97 in non-GAAP EPS. Given its recent performance and momentum, the company is likely to top this estimate and beat analyst earnings estimates of $1.33 per share. SANM 12 Month Guidance 9 Month Results % Target Completion Revenue $6.76 billion $5.69 billion 84.17% Non-GAAP EPS $3.97 $3.52 88.66% Similarly, it has also ramped up its ability to generate cash, with the levered FCF margin improving sequentially from 1.6% in Q4 2021, 2.5% in Q1 2022, and 3.4% in the MRQ, and its FCF sequentially growing from $0.67 per share to $1.07 per share during the same period. This is further facilitated by a YoY improvement of 3.4% in the company's cash cycle days. Meanwhile, its CapEx has also consistently evolved, over doubling in the last 9 months, from $17.4 million to $37.4 million. SANM's earnings call indicates that the CapEx for the upcoming quarter is expected to be around $45 million, "driven by growth of new programs and to support future growth."

Shareholder Returns

SANMUS ElectronicUS Market
7D1.6%-2.2%-2.5%
1Y17.6%-24.1%-23.2%

Return vs Industry: SANM exceeded the US Electronic industry which returned -21.7% over the past year.

Return vs Market: SANM exceeded the US Market which returned -21.5% over the past year.

Price Volatility

Is SANM's price volatile compared to industry and market?
SANM volatility
SANM Average Weekly Movement4.6%
Electronic Industry Average Movement6.7%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: SANM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SANM's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198032,000Jure Solahttps://www.sanmina.com

Sanmina 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.

Sanmina Corporation Fundamentals Summary

How do Sanmina's earnings and revenue compare to its market cap?
SANM fundamental statistics
Market CapUS$2.66b
Earnings (TTM)US$247.96m
Revenue (TTM)US$7.33b

10.7x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SANM income statement (TTM)
RevenueUS$7.33b
Cost of RevenueUS$6.74b
Gross ProfitUS$593.01m
Other ExpensesUS$345.05m
EarningsUS$247.96m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)4.29
Gross Margin8.09%
Net Profit Margin3.38%
Debt/Equity Ratio17.6%

How did SANM perform over the long term?

See historical performance and comparison