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Sanmina (NasdaqGS:SANM) Q4 2020 Earnings Prep

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Sanmina Corporation (NasdaqGS:SANM) is scheduled to report Q4 earnings results on November 10, 2020.

The company is expected to report earnings of $0.78/share on revenue of $1.791 billion. The consensus earnings per share (EPS) of $0.78/share is based on a poll of 4 analysts and represents a decline in eps of −7.6% over the same quarter last year, when the company reported earnings of $0.84/share.

The revenue forecast of $1.791 billion based on a poll of 3 analysts implies a year-over-year (YoY) decline in revenue of −5.4%. Last year the company reported $1.892 billion in revenue for the quarter.

Expected to report EPS contraction of −7.6% for Q4, 2020
Metric Expected Prior Year YoY Change
Revenue $1,790.54 $1,892.21 −5.4%
EPS $0.78 $0.84 −7.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Sanmina Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2020 $0.34 $0.86 154.0% Beat
Q2, 2020 $0.59 $0.32 −45.5% Missed
Q1, 2020 $0.70 $0.79 13.4% Beat
Q4, 2019 $0.80 $0.84 5.3% Beat
Q3, 2019 $0.77 $0.82 6.5% Beat
Q2, 2019 $0.74 $0.91 23.0% Beat
Q1, 2019 $0.70 $0.83 17.9% Beat
Q4, 2018 $0.66 $0.67 1.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 18.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $25.22 $29.81 18.2% Increase
April 27, 2020 $26.71 $26.93 0.8% Increase
January 27, 2020 $34.29 $33.38 −2.7% Decline
October 28, 2019 $31.47 $30.75 −2.3% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.12, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.12 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Sanmina Corporation is currently trading at $28.22/share, up 5.7% for the day. The company is trading at approximately 80.9% of its 52-week high of $34.96/share. The company’s stock price is down −5.3% since the last earnings report and up 13.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 55.50 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SANM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 17.73 and a forward P/E multiple of 9.33.

Sanmina Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.16. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q3
Period End Date June 27, 2020
Stock Price (Current) $28.22
P/E Ratio 17.7x
P/E Ratio (Fwd) 9.3x
PEG Ratio −1.3
Total Debt / Total Capital 37.7%
Levered Free Cash Flow $323.4 million
EV / EBITDA 5.3x

Finbox

Sanmina Corporation is a small-cap stock with a market capitalization of $1.809 billion and a total enterprise value of $1.756 billion. The company operates in the Information Technology sector and the Electronic Equipment, Instruments & Components industry.

Sanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide. It operates in two segments, Integrated Manufacturing Solutions; and Components, Products and Services. The company offers product design and engineering, including concept development, detailed design, prototyping, validation, preproduction, and manufacturing design release; manufacturing solutions of components, subassemblies, and complete systems; final system assembly and test services; direct order fulfillment and logistics services; after-market product service and support; and supply chain management services. It also provides interconnect systems, such as printed circuit board fabrication, backplane, cable assemblies, and plastic injection moldings; mechanical systems comprising enclosures and precision machining; memory, radio frequency, optical, and microelectronic solutions; defense and aerospace products; storage solutions; and cloud-based manufacturing execution software. The company offers its products and services to companies that serve the communications networks, computing and data storage, industrial, defense and aerospace, medical, automotive, energy, and other industries. The company was formerly known as Sanmina-SCI Corporation and changed its name to Sanmina Corporation in November 2012. Sanmina Corporation was founded in 1980 and is headquartered in San Jose, California.

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