Why Sanmina (SANM) is a High-Conviction Growth Stock for 2026 and Beyond

Sanmina (SANM) has emerged as a standout performer in the electronics manufacturing sector, driven by a compelling combination of robust Zacks Style Scores and accelerating earnings momentum. As investors look ahead to 2026, the company's financial trajectory and valuation metrics position it as a high-conviction growth stock with significant long-term outperformance potential.

Zacks Style Scores: A Framework for Outperformance

Sanmina's current Zacks Rank of #1 (Strong Buy) underscores its alignment with a disciplined investment strategy. This ranking is bolstered by a Value Grade of A in the Zacks Value, Growth, and Momentum (VGM) Score framework, which highlights its undervaluation relative to peers and strong earnings growth prospects. The company's Momentum Style Score of B further reinforces its appeal for trend-following investors, as it reflects consistent positive surprises in earnings and revenue over recent quarters.

The forward price-to-earnings ratio of 15.98 is particularly noteworthy in a sector where many firms trade at premium valuations. This metric suggests Sanmina is offering growth at a reasonable price, a critical factor for long-term investors seeking to balance risk and reward. Analysts have also raised their 2026 earnings estimates by $2.70 to $9.64 per share, signaling confidence in the company's ability to sustain profitability amid macroeconomic headwinds.

Earnings Momentum: A Catalyst for Growth

Sanmina's fiscal 2025 results provide a clear blueprint for its 2026 ambitions. The company reported $8.13 billion in revenue for the year, a 7.4% year-over-year increase, with non-GAAP diluted earnings per share rising 14.4% to $6.04. These figures outperformed consensus expectations, with an average earnings surprise of 5.4%, a testament to its operational efficiency and demand resilience.

Free cash flow generation further strengthens Sanmina's case. The firm generated $478 million in free cash flow during fiscal 2025, a critical metric for investors evaluating a company's ability to fund innovation, reduce debt, or return capital to shareholders. Looking ahead, Sanmina's guidance for Q1 2026-projecting revenue between $2.9 billion and $3.2 billion-indicates a post-acquisition growth trajectory that could amplify its market share gains in high-margin segments like aerospace and defense.

Strategic Positioning for Long-Term Outperformance

Sanmina's success is not merely a function of short-term execution but a reflection of its strategic focus on high-growth verticals. The company's recent acquisitions, including its expansion into advanced manufacturing and digital transformation services, have diversified its revenue streams and enhanced its competitive moat. This strategic agility, combined with its strong Zacks Style Scores, positions Sanmina to capitalize on secular trends such as industrial automation and AI-driven infrastructure demand.

For investors, the alignment of Sanmina's valuation, earnings momentum, and strategic direction creates a rare opportunity. While the stock's forward P/E may appear modest, its earnings growth trajectory and cash flow generation suggest it is poised to deliver outsized returns as it scales its high-margin offerings.

Conclusion

Sanmina's combination of a #1 Zacks Rank, favorable valuation metrics, and accelerating earnings growth makes it a compelling candidate for long-term outperformance. As the company executes on its strategic priorities and benefits from favorable industry dynamics, investors with a 2026+ horizon may find SANM to be a cornerstone holding in a growth-oriented portfolio.