Why Is Sanmina (SANM) Up 10.5% Since Last Earnings Report?

A month has gone by since the last earnings report for Sanmina (SANM). Shares have added about 10.5% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Sanmina due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Sanmina Corporation before we dive into how investors and analysts have reacted as of late.

Sanmina Q1 Earnings Beat Estimates on Healthy Top-Line Growth

Sanmina reported strong first-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate.

The California-based electronics manufacturing company posted a solid 59% increase in revenues year over year, driven by strong demand across several markets. Improved free cash flow is a positive sign.

Net Income

Net income on a GAAP basis was $49.3 million or 89 cents per share compared with $65 million or $1.16 per share in the prior-year quarter. Despite top-line growth, higher operating expenses impacted the bottom line.

Non-GAAP net income in the reported quarter was $132.4 million or $2.38 per share compared with $80.2 million or $1.44 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $2.15.

Revenues

Net sales increased to $3.19 billion from $2 billion in the year-ago quarter, primarily driven by growth across multiple end markets. The top line beat the consensus estimate by $90 million.

In the first quarter of fiscal 2026, the Integrated Manufacturing Solutions segment generated $2.79 billion in revenues, up 72.2% year over year. The segment contributed 87.5% to revenues. Strong end-market demand, higher customer orders, and improved operational efficiency drove solid sales growth in this segment.

The Components, Products, and Services segment revenues were $434 million, up 4.33% year over year, backed by growth in several end markets.

By end market, revenues from Communications Networks and Cloud & AI Infrastructure rose to $1,964 million from $737 million, while revenues from Industrial & Energy, Medical, Defense & Aerospace, and Automotive & Transportation declined to $1.226 billion from $1.269 billion a year ago.

Other Details

Non-GAAP gross profit was $297.9 million compared with $180.1 million in the year-ago quarter. The improvement was driven by higher revenues, improved product mix, better operational efficiency, and cost control. Non-GAAP operating income totaled $192 million compared with $112.7 million in the year-ago period. Non-GAAP operating margin was 6%, marginally up from 5.6% in the prior-year quarter.

Cash Flow & Liquidity

In the first quarter of fiscal 2026, Sanmina generated $178.7 million of net cash from operating activities compared with $63.9 million in the year-ago quarter. As of Dec. 27, 2025, the company had $1.42 billion in cash and cash equivalents and $ 2 billion in long-term debt. During the quarter, the company repurchased 0.5 million shares for $79 million.

Outlook

For the second quarter of fiscal 2026, revenues are expected to be in the range of $3.1-$3.4 billion. Management estimates non-GAAP earnings per share in the band of $2.25-$2.55. Non-GAAP operating margin is expected in the band of 5.7-6.2%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Sanmina has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Sanmina has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

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This article originally published on Zacks Investment Research (zacks.com).

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