Sanmina's Earnings Beat Estimates but Stock Plummets
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Fool
- Strong Earnings: Sanmina reported nearly $3.19 billion in net sales for Q1 FY2026, a significant increase from just over $2 billion last year, highlighting the company's robust growth potential in the AI market.
- Profit Growth: The company’s non-GAAP net income exceeded $132 million ($2.38 per share), surpassing analyst expectations of $2.14 per share, indicating improved profitability.
- Negative Market Reaction: Despite beating estimates, investors reacted negatively to the company's weak guidance, resulting in a nearly 22% drop in stock price, reflecting a disconnect between high market expectations and actual performance.
- Cautious Outlook: Sanmina projects Q2 net sales between $3.1 billion and $3.4 billion; although the adjusted EPS forecast exceeds the average analyst estimate, the market's expectation for higher sales figures indicates investor concerns about future performance.
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Analyst Views on SANM
Wall Street analysts forecast SANM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SANM is 180.00 USD with a low forecast of 180.00 USD and a high forecast of 180.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 152.650
Low
180.00
Averages
180.00
High
180.00
Current: 152.650
Low
180.00
Averages
180.00
High
180.00
About SANM
Sanmina Corporation is a global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. It provides end-to-end manufacturing solutions, delivering support to original equipment manufacturers in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure markets. Its operations are managed in two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS segment consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment. CPS includes advanced printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts and plastic injected molded parts. Its products include optical, radio frequency and microelectronic design and manufacturing services, multi-chip package memory solutions, high-performance storage platforms and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sanmina Corporation Reports Strong Q1 2026 Earnings with $3.19 Billion Revenue
- Significant Revenue Growth: Sanmina Corporation reported Q1 2026 revenue of $3.19 billion, a 59% year-over-year increase, demonstrating strong performance in communication networks and cloud infrastructure, which further solidifies its market position.
- Improved Profitability: The non-GAAP operating profit reached $192 million, representing 6% of revenue and a 40 basis point increase year-over-year, reflecting ongoing improvements in cost control and operational efficiency, which enhances investor confidence.
- Optimistic Future Outlook: The company expects Q2 2026 revenue to range between $3.1 billion and $3.4 billion, reflecting a 62% year-over-year growth, while targeting over $16 billion in revenue by 2027, showcasing strong confidence in AI market opportunities.
- Strong Financial Position: Cash and cash equivalents stood at $1.42 billion with free cash flow of $92 million and a net leverage ratio of only 0.8x, indicating a robust financial foundation to support future strategic investments and growth.
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Sanmina's Earnings Beat Estimates but Stock Plummets
- Strong Earnings: Sanmina reported nearly $3.19 billion in net sales for Q1 FY2026, a significant increase from just over $2 billion last year, highlighting the company's robust growth potential in the AI market.
- Profit Growth: The company’s non-GAAP net income exceeded $132 million ($2.38 per share), surpassing analyst expectations of $2.14 per share, indicating improved profitability.
- Negative Market Reaction: Despite beating estimates, investors reacted negatively to the company's weak guidance, resulting in a nearly 22% drop in stock price, reflecting a disconnect between high market expectations and actual performance.
- Cautious Outlook: Sanmina projects Q2 net sales between $3.1 billion and $3.4 billion; although the adjusted EPS forecast exceeds the average analyst estimate, the market's expectation for higher sales figures indicates investor concerns about future performance.
Continue Reading