Is Sanmina Stock a Smart Buy Before Q1 Earnings Report?

Sanmina Corporation SANM is scheduled to report first-quarter fiscal 2026 earnings after the market closes on Jan. 26. The Zacks Consensus Estimate for sales and earnings is pegged at $3.1 billion and $2.15 per share, respectively. Earnings estimates for fiscal 2026 and 2027 have remained stable at $9.64 and $11.46, respectively, over the past 60 days.SANM Estimate TrendImage Source: Zacks Investment ResearchEarnings Surprise HistoryThe leading electronics manufacturing services provider delivered a trailing four-quarter earnings surprise of 5.35%, on average, beating estimates in each of the previous quarters. In the last reported quarter, the company’s earnings surprise was 6.37%. Image Source: Zacks Investment ResearchEarnings WhispersOur proven model does not predict an earnings beat for Sanmina for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Sanmina currently has an ESP of 0.00% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here..Factors Shaping the Quarterly PerformanceDuring the quarter, Sanmina completed the acquisition of ZT Systems’ data center infrastructure manufacturing business from Advanced Micro Devices, Inc. AMD in a deal valued at up to $3 billion. This agreement significantly strengthens Sanmina’s position in the Cloud and AI market. It expands Sanmina’s manufacturing scale, adds advanced facilities in New Jersey, Texas, and the Netherlands, and enhances capabilities such as systems integration, liquid cooling, and end-to-end production. This is likely to have generated incremental revenues in the upcoming quarter.Sanmina also entered into a partnership with Koncar, an electrical industry company, to co-design a custom medium-voltage transformer and explore further collaboration, strengthening its position in power transmission, distribution, and energy infrastructure manufacturing. This is likely to have generated higher revenues in the quarter.Price PerformanceOver the past year, Sanmina has surged 116.2% compared with the Electronics - Manufacturing Services industry’s growth of 84.4%. The company also outpaced its peer Jabil Inc. JBL, which has gained 47.6%, while trailing Celestica Inc. CLS, whose shares rose an impressive 129.8% over the same period.Image Source: Zacks Investment ResearchKey Valuation MetricFrom a valuation standpoint, Sanmina appears to be trading relatively lower than the industry but above its mean. Going by the price/earnings ratio, the company’s shares currently trade at 17.76 forward earnings, lower than 25.74 for the industry but higher than the stock’s mean of 11.46.Image Source: Zacks Investment ResearchInvestment ConsiderationsSanmina is experiencing strong demand across key end markets, with growth driven mainly by communications networks, cloud and AI infrastructure, medical, and defense and aerospace businesses. Its diversified presence reduces reliance on any single industry, while its end-to-end offerings from design to manufacturing and support give it a competitive edge.Despite its strengths, Sanmina faces ongoing supply-chain disruptions, causing component shortages, delivery delays, and inventory buildup. Strong competition from larger EMS is pressuring sales and margins. High exposure to overseas manufacturing increases geopolitical risks, tariffs, and higher costs, while elevated R&D spending further weighs on profitability.End NoteSanmina remains committed to making strategic investments in the capabilities and technologies necessary to strengthen its market position and support long-term financial goals. Its dynamic manufacturing strategy remains a major advantage. However, the company faces challenges from strong competition, supply chain issues, high R&D costs, and a difficult operating environment in China, which could pressure profitability and raise concerns about long-term operations there.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Jabil, Inc. (JBL): Free Stock Analysis Report Celestica, Inc. (CLS): Free Stock Analysis Report Sanmina Corporation (SANM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks