Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 9.6 |
| EV/EBITDA | 1.8 |
| Fwd P/E | 7.4 |
| PEG | 7.2 |
| Analyst target | 3.0 |
- ▸Forward P/E: 16.9x
- ▸PEG: 0.97
SANM · Why this verdict
Why Sanmina (SANM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sanmina delivered 102% year-over-year earnings growth and beat estimates in all four of the last quarters with an average positive surprise of 14.4%, including a 31.8% beat in the most recent quarter, reflecting broad-based margin recovery across its electronics manufacturing operations. Earnings | Earnings beat streak extends to 6 consecutive quarters with average surprise remaining above 8%. | →Stable |
| Counter100%+ earnings growth typically reflects a recovery from deeply depressed prior-period results; the base effect will become increasingly difficult to sustain as comparisons normalize. | ||
Sanmina ranks as an industry growth leader in electronic components with a peer growth score near maximum, reflecting revenue growth driven by recovery in electronics manufacturing demand and operational leverage from improved utilization rates. Peer-rank breakdown | Revenue growth remains above 20% year-over-year for at least 2 of the next 4 quarters as electronics demand sustains. | →Stable |
| CounterElectronics manufacturing growth is highly cyclical; a pullback in semiconductor or consumer electronics demand could reverse the current growth trajectory within 1 to 2 quarters. | ||
A significant portion of Sanmina's manufacturing and revenue is derived from non-U.S. operations, creating exposure to currency fluctuation, geopolitical disruption, and regulatory differences that can impair margins without any domestic demand change. Bear case | Non-U.S. revenue contribution remains broadly stable with no material currency-related write-downs or facility closures announced in the next 12 months. | →Stable |
| CounterGlobal manufacturing diversification is typically a strength in electronics, providing cost flexibility and access to regional demand pools that domestic-only manufacturers cannot reach. | ||
Free cash flow is negative at 31% of net income, meaning the company is consuming more cash than it is generating despite strong reported earnings, which raises questions about the quality and durability of the earnings recovery. Quality breakdown | Free cash flow turns positive on a trailing twelve-month basis within 12 months as working capital normalizes following the revenue growth spike. | →Stable |
| CounterNegative free cash flow relative to earnings in a high-growth electronics manufacturer often reflects rapid receivables and inventory build to support revenue expansion, which can reverse sharply when growth moderates. | ||
Sanmina delivered 102% year-over-year earnings growth and beat estimates in all four of the last quarters with an average positive surprise of 14.4%, including a 31.8% beat in the most recent quarter, reflecting broad-based margin recovery across its electronics manufacturing operations.
→StableEarnings
- Expectation
- Earnings beat streak extends to 6 consecutive quarters with average surprise remaining above 8%.
Counter100%+ earnings growth typically reflects a recovery from deeply depressed prior-period results; the base effect will become increasingly difficult to sustain as comparisons normalize.
Sanmina ranks as an industry growth leader in electronic components with a peer growth score near maximum, reflecting revenue growth driven by recovery in electronics manufacturing demand and operational leverage from improved utilization rates.
→StablePeer-rank breakdown
- Expectation
- Revenue growth remains above 20% year-over-year for at least 2 of the next 4 quarters as electronics demand sustains.
CounterElectronics manufacturing growth is highly cyclical; a pullback in semiconductor or consumer electronics demand could reverse the current growth trajectory within 1 to 2 quarters.
A significant portion of Sanmina's manufacturing and revenue is derived from non-U.S. operations, creating exposure to currency fluctuation, geopolitical disruption, and regulatory differences that can impair margins without any domestic demand change.
→StableBear case
- Expectation
- Non-U.S. revenue contribution remains broadly stable with no material currency-related write-downs or facility closures announced in the next 12 months.
CounterGlobal manufacturing diversification is typically a strength in electronics, providing cost flexibility and access to regional demand pools that domestic-only manufacturers cannot reach.
Free cash flow is negative at 31% of net income, meaning the company is consuming more cash than it is generating despite strong reported earnings, which raises questions about the quality and durability of the earnings recovery.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive on a trailing twelve-month basis within 12 months as working capital normalizes following the revenue growth spike.
CounterNegative free cash flow relative to earnings in a high-growth electronics manufacturer often reflects rapid receivables and inventory build to support revenue expansion, which can reverse sharply when growth moderates.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sanmina's 102% year-over-year earnings growth and perfect four-quarter beat streak mark an exceptional operational turnaround, but negative free cash flow and non-U.S. geographic concentration introduce execution and currency risks that temper the strength of the fundamental narrative.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 3.2 |
| Gross margin | 0.0 |
| Op margin | 2.3 |
| Net margin | 1.1 |
| Current ratio | 6.1 |
| FCF quality | 0.0 |
| Moat | 4.9 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -31% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 102% YoY
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 1.2 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.3 |
| Price target | 5.3 |
| erm sentiment | 4.3 |
- ▸Light analyst coverage (4.0) — signal dampened
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $37,929,123 (0.322% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.2 |
| quality rank | 3.4 |
| growth rank | 9.3 |
- ▸Industry growth leader
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.5 |
| 52w position | 5.2 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.5 |
| days to cover | 8.1 |
| volatility | 0.0 |
| put call | 2.2 |
| implied vol | 0.0 |
| beta | 4.8 |
| debt equity | 5.4 |
- ▸Elevated put/call: 1.67
- ▸High IV: 96%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 4.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.7 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.93
Upside
-13.5%
Downside
14.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityAggressive — Beta 1.56>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.8<4.5.
The strongest dimensions are Growth at 10.0, Technical at 8.2, and Catalyst at 7.2; the weakest are Momentum at 2.8, Quality at 3.2, and Insider at 3.4. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.93 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Growth Perfect Beat Streak
Trip ifEPS surprise falls below negative 5% in at least 2 of the next 4 quarters.
- P2Industry Growth Leader Ranking
Trip ifRevenue growth falls below 10% year-over-year for at least 2 consecutive quarters.
- P3Negative Fcf Red Flag
Trip ifFree cash flow remains negative for more than 3 consecutive quarters with no trend improvement.
- P4Geographic Concentration Non Us
Trip ifA currency-related charge or facility closure reduces non-U.S. revenue by more than 10% in any single quarter.