Is Sanmina (SANM) Still Undervalued As Earnings Beat And Guidance Rise?

What Sanmina’s Latest Earnings Mean For Investors

Sanmina (SANM) has stepped into the spotlight after reporting third quarter sales of US$3.46b and net income of US$117.13m, alongside raised full year revenue guidance and inclusion in the Zacks Rank #1 growth stocks list.

These updates provide fresh data points that investors can use to assess whether the recent share performance and current valuation align with the company’s earnings profile and growth characteristics.

See our latest analysis for Sanmina.

Sanmina’s share price has pulled back over the last three months, with a 90 day share price return showing an 18.39% decline. Year to date it is still up 27.24%, and the 1 year total shareholder return of 67.16% points to strong longer term momentum around the stock, supported by the latest earnings beat, higher full year guidance and recent inclusion in the Zacks Rank #1 growth list.

If Sanmina’s earnings story has your attention, it can be useful to see what else is on the move. Take a look at our 36 power grid technology and infrastructure stocks

Sanmina appears to have real earnings power and a solid pipeline of work, yet the stock has cooled off after a strong 1 year run. So are you paying up for quality here, or getting it at a fair price?

Most Popular Narrative: 15.5% Undervalued

Sanmina’s most followed narrative sets a fair value of $240 per share, which sits above the last close at $202.68 and suggests a valuation gap investors are watching.

The imminent acquisition of ZT Systems is expected to add $5–6 billion of annual run-rate revenue, positioning Sanmina to double its net revenue within three years and capitalize on explosive growth in data center and AI infrastructure investment, this should provide a multi-year boost to overall revenue and EPS accretion from synergies and integration.

Read the complete narrative. Read the complete narrative.

Want to see what underpins that higher fair value for Sanmina? The narrative leans on faster top line growth, firm margins and a richer future earnings multiple. Curious which assumptions move the needle most over time.

Result: Fair Value of $240 (UNDERVALUED)

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

However, Sanmina’s story could change quickly if the ZT Systems deal runs into integration or inventory problems, or if any large customer meaningfully reduces orders.

Find out about the key risks to this Sanmina narrative.

Another View on Sanmina’s Valuation

The analyst narrative frames Sanmina as about 15.5% undervalued at a fair value of $240 per share, using assumptions around future earnings and a P/E of roughly 36x. Our DCF model points in the opposite direction and indicates the stock is trading well above its estimated future cash flow value of $34.13. That kind of gap raises the question of which set of assumptions investors may view as more reliable over the long run.

For a closer look at how this cash flow view is built and what would need to change for the picture to shift, check the 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 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Sanmina’s story includes both clear positives and areas that need closer attention, so it makes sense to review the full picture and act while the data is fresh. To weigh those trade offs for yourself, start with a balanced view of the 3 key rewards and 2 important warning signs.

Looking For More Investment Ideas Beyond Sanmina?

If Sanmina has sharpened your interest in fresh opportunities, do not stop here. Broaden your watchlist now before other investors identify the most compelling ideas.

• Explore potential compounding by reviewing companies with consistent payouts and resilience through the 8 dividend fortresses.
• Look for potential value opportunities by reviewing companies that screen on both price and quality using the 49 high quality undervalued stocks.
• Prioritize stability by scanning companies that show robust financial footing through the 78 resilient stocks with low risk scores.

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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