Analysis and Insights
Valuation Metrics:
Sanmina Corp (SANM) currently has a P/E ratio of 17.63 (Q4 2024) and 18.74 (Q1 2025), which is slightly above industry averages, suggesting moderate overvaluation. The EV/EBITDA ratio of 7.73 and 8.46 for the same periods indicates a fair valuation relative to earnings. The P/S ratio of 0.52 and 0.56 reflects undervaluation relative to revenue, while the P/B ratio of 1.69 and 1.83 suggests moderate overvaluation relative to book value.
Financial Performance:
Sanmina reported stable revenue of $2.017 billion (Q4 2024) and $2.006 billion (Q1 2025), with net income growth from $61.38 million to $65.03 million. Gross margin improved slightly to 10.55%, while ROE remained stable at 8.49% and 8.37%. The company maintains a healthy current ratio of 1.09 and 1.16, indicating strong liquidity.
Market Sentiment and Analyst Insights:
Recent news indicates that Sanmina's stock entered oversold territory with an RSI of 29.3, suggesting potential buying opportunities. Analysts have upgraded the stock to Hold with a price target of $92, reflecting an 11.07% upside. However, insider selling by a director may signal caution.
Conclusion:
While some valuation metrics suggest moderate overvaluation, the stock's low beta, stable financials, and analyst upgrades indicate it is not significantly overvalued. The potential upside and oversold condition make it a cautious buy.