- Sanmina Corporation recently reported its third-quarter earnings and provided guidance for the fourth fiscal quarter, projecting revenue between US$2.0 billion and US$2.1 billion and GAAP diluted earnings per share between US$1.21 and US$1.31.
- The company also finalized a new US$3.5 billion senior secured credit agreement to support the acquisition of ZT Group Int’l, a move expected to significantly expand its capabilities and operations.
- With Sanmina’s robust earnings performance and the new acquisition financing in place, we’ll assess how these developments could impact its long-term growth outlook.
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Sanmina Investment Narrative Recap
To be a Sanmina shareholder, you need confidence in the company’s ability to efficiently integrate large acquisitions, like ZT Systems, and capitalize on rising electronics demand. The recent US$3.5 billion credit agreement to back the ZT acquisition directly addresses a key near-term catalyst, expansion into fast-growing data center infrastructure, but also amplifies the principal risk of increased working capital, inventory exposure, and post-deal execution. For now, this financing move meaningfully shapes both the opportunity and the risk profile for the business.
The July earnings report is especially relevant in this context, as it showed Sanmina delivering stronger sales and profit growth compared to a year ago, with revenues reaching US$2.04 billion in Q3 and net income up to US$68.62 million. These results highlight how the company’s core business momentum can help support ambitious moves like the ZT acquisition, potentially smoothing integration in the quarters ahead.
However, it’s important to contrast the growth outlook with the risk that the enlarged balance sheet may face pressure if ZT’s inventory doesn’t turn over as planned, an issue all investors should be aware of...
Read the full narrative on Sanmina (it's free!)
Sanmina's outlook projects $9.7 billion in revenue and $375.6 million in earnings by 2028. This scenario relies on 6.4% annual revenue growth and a $116.4 million increase in earnings from the current $259.2 million.
Uncover how Sanmina's forecasts yield a $114.50 fair value, in line with its current price.
Exploring Other Perspectives
Simply Wall St Community members provided fair value estimates for Sanmina ranging from as low as US$7.30 up to US$114.50, with only two perspectives included. With the ZT acquisition raising the stakes on inventory and execution risk, this diversity highlights how performance outcomes could sharply diverge over time, consider exploring a range of opinions to inform your own view.
Explore 2 other fair value estimates on Sanmina - why the stock might be worth less than half the current price!
Build Your Own Sanmina Narrative
Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your Sanmina research is our analysis highlighting 2 key rewards that could impact your investment decision.
- Our free Sanmina research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sanmina's overall financial health at a glance.
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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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