Sanmina's (NASDAQ:SANM) Q4 Sales Beat Estimates
Electronics manufacturing services company Sanmina (NASDAQ:SANM) reported Q4 CY2024 results beating Wall Street's revenue expectations , with sales up 7% year on year to $2.01 billion. On the other hand, next quarter's revenue guidance of $1.95 billion was less impressive, coming in 2.1% below analysts' estimates. Its non-GAAP profit of $1.44 per share was 5.1% above analysts' consensus estimates.
Is now the time to buy Sanmina? Find out in our full research report.
Revenue: $2.01 billion vs analyst estimates of $1.98 billion (7% year-on-year growth, 1.5% beat)
Adjusted EPS: $1.44 vs analyst estimates of $1.37 (5.1% beat)
Revenue Guidance for Q1 CY2025 is $1.95 billion at the midpoint, below analyst estimates of $1.99 billion
Adjusted EPS guidance for Q1 CY2025 is $1.35 at the midpoint, below analyst estimates of $1.42
Operating Margin: 4.4%, in line with the same quarter last year
Free Cash Flow Margin: 2.3%, down from 4.9% in the same quarter last year
Market Capitalization: $4.56 billion
"We delivered solid first quarter financial results, with revenue towards the high end and non-GAAP earnings per share exceeding our outlook. We continue to execute well, as evident in our consistent operating margin and cash generation," stated Jure Sola, Chairman and Chief Executive Officer of Sanmina Corporation.
Founded in 1980, Sanmina (NASDAQ:SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.
A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Sanmina struggled to consistently increase demand as its $7.7 billion of sales for the trailing 12 months was close to its revenue five years ago. This fell short of our benchmarks and is a sign of poor business quality.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Sanmina's recent history shows its demand has stayed suppressed as its revenue has declined by 4.9% annually over the last two years.
This quarter, Sanmina reported year-on-year revenue growth of 7%, and its $2.01 billion of revenue exceeded Wall Street's estimates by 1.5%. Company management is currently guiding for a 6.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 8.4% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will fuel better top-line performance.
Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Sanmina was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.5% was weak for an industrials business. This result isn't too surprising given its low gross margin as a starting point.
Analyzing the trend in its profitability, Sanmina's operating margin might have seen some fluctuations but has generally stayed the same over the last five years, which doesn't help its cause.
In Q4, Sanmina generated an operating profit margin of 4.4%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable.
Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sanmina's EPS grew at a solid 10% compounded annual growth rate over the last five years, higher than its flat revenue. However, this alone doesn't tell us much about its business quality because its operating margin didn't expand.
Diving into the nuances of Sanmina's earnings can give us a better understanding of its performance. A five-year view shows that Sanmina has repurchased its stock, shrinking its share count by 23.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Sanmina, its two-year annual EPS declines of 1.4% mark a reversal from its (seemingly) healthy five-year trend. We hope Sanmina can return to earnings growth in the future.
In Q4, Sanmina reported EPS at $1.44, up from $1.30 in the same quarter last year. This print beat analysts' estimates by 5.1%. Over the next 12 months, Wall Street expects Sanmina's full-year EPS of $5.42 to grow 15.8%.
It was good to see Sanmina narrowly top analysts' revenue expectations this quarter. We were also happy its EPS outperformed Wall Street's estimates. On the other hand, its revenue and EPS guidance for next quarter fell short of Wall Street's estimates. Overall, this quarter was mixed. The stock traded up 2.5% to $80.60 immediately after reporting.
Should you buy the stock or not? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
28 minutes ago
- Yahoo
Wall Street on Edge: Inflation Spike, $58B Debt Test, and Trade Turmoil Collide
Wall Street is holding its breath as two market-moving forces line up: inflation and debt. Investors are watching closely as the U.S. and China restart trade talks in London, aiming to ease tensions and avoid another round of tariff escalations. Meanwhile, a $58 billion Treasury auction could test demand for U.S. debt at a time when long-end yields hover near 5%a level many thought would spark broader market reactions. BMO's Ian Lyngen calls this week's combo of May CPI and Treasury supply a tradable event, with core inflation expected to accelerate to 2.9% year-over-yearthe first uptick of the year. The S&P 500 (SPY) sits roughly 2% from its February peak, but volatility could return fast depending on how these numbers land. Warning! GuruFocus has detected 5 Warning Sign with META. Despite the rebound from April's tariff-driven slide, institutional investors have yet to jump back into equities in full force. Deutsche Bank notes that institutional positioning has been this low less than a quarter of the time since 2010. JPMorgan and Barclays, however, suggest the tide could be turning, with more big money managers set to ramp up equity exposure. That shift hasn't shown up yetBank of America's clients were net sellers last week, with institutions pulling out while hedge funds and retail buyers stepped in. Strategist Jill Carey Hall thinks the market may have already priced in much of the deglobalization risk, but not the potential upside from underappreciated tax policy tailwinds. On the corporate front, action is heating up. Tesla (NASDAQ:TSLA) isn't grabbing headlines today, but its peers are moving fast. Meta's (NASDAQ:META) CEO Mark Zuckerberg is going all-in on artificial general intelligence, quietly assembling a powerhouse team to build out the next big wave in AI. Boeing (NYSE:BA) just secured its biggest monthly order tally in over a yearmuch of it inked during President Trump's trip to the Middle East. Cisco (NASDAQ:CSCO) is rolling out new AI-powered upgrades across its networking portfolio to stay competitive in the enterprise race. Taiwan Semiconductor (NYSE:TSM) posted a 40% revenue surge in May as chipmakers rushed to build inventory ahead of potential trade roadblocks. Not everything was rosyMcDonald's (NYSE:MCD) was slapped with a rare sell rating from Redburn Atlantic, and Citigroup (NYSE:C) is preparing to book hundreds of millions more in loan loss provisions, signaling early cracks in consumer credit health. This article first appeared on GuruFocus.
Yahoo
28 minutes ago
- Yahoo
QUALCOMM (QCOM) to Acquire Alphawave for $2.4 Billion in Data Center Expansion Push
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the 10 AI Stocks on Wall Street's Radar. On June 9, the company reported that it has agreed to buy semiconductor company Alphawave IP Group Plc for an estimated $2.4 billion in cash, aiming to expand its technology and key assets for expanding into data centers. The companies revealed in a Monday statement that the offer is equivalent to about 183 pence per share for Alphawave, a 96% premium to the company's share price on March 31. This was the last trading day prior to the companies disclosing the deal discussion. While the deal is subject to regulatory and shareholder approval, it is anticipated to close in the first quarter of 2026. A medical staff analyzing data in an occupational health center. 'The acquisition of Alphawave Semi aims to further accelerate and provide key assets for Qualcomm's expansion into data centers,' the company said. While Qualcomm has made two alternative all-share offers for Alphawave following multiple deadline extensions from the UK takeover panel, Alphawave plans to unanimously recommend the cash offer to its shareholders. They deem it to be fair and reasonable. 'Under Tony's leadership Alphawave Semi has developed leading high-speed wired connectivity and compute technologies that are complementary to our power-efficient CPU and NPU cores. Qualcomm's advanced custom processors are a natural fit for data center workloads. The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high growth areas, including data center infrastructure.' – Cristiano Amon, president and CEO of Qualcomm Incorporated. QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless technologies, supplies chips for mobile, automotive, and IoT devices, licenses patents, and invests in emerging industries worldwide. While we acknowledge the potential of QCOM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Sign in to access your portfolio
Yahoo
28 minutes ago
- Yahoo
Alphabet (GOOGL) Lands Surprise Win as OpenAI Picks Google Cloud for AI Expansion
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks on Wall Street's Radar. On June 10, Reuters reported that OpenAI is planning to add Alphabet Inc. (NASDAQ:GOOGL)'s Google cloud service to meet its growing needs for computing capacity. Despite being competitors in the artificial intelligence space, the collaboration is a surprising highlight of the strategic need for companies to pool resources to accelerate AI adoption. According to the sources, the deal was under discussion for a few months and was finalized in May. The massive demand for computing to train and deploy AI models significantly reshapes competitive dynamics, highlighting OpenAI's latest efforts to diversify its compute sources beyond Microsoft. Google's cloud unit will now supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, a major win for the company. Discussing the aforementioned deal, Scotiabank analysts have deemed the development to be 'somewhat surprising.' They pointed toward growth opportunities for Google's Cloud unit and also expressed caution regarding competition from ChatGPT. 'The deal … underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands. Ultimately, we view this as a big win for Google's cloud unit, but … there are continued worries that ChatGPT is becoming an incrementally larger threat to Google's search dominance.' While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data