Home / Business and Economy / Sanmina Stock Soars: Buy or Already Priced In?
Sanmina Stock Soars: Buy or Already Priced In?
21 Dec
Summary
- Sanmina's stock has surged 101% this year, reaching $151.52.
- Acquisition of ZT Systems is expected to double revenue within three years.
- Analysts predict upside to $190, but valuation multiples raise concerns.
Sanmina has emerged as a significant player in electronics manufacturing, with its stock price experiencing a substantial 101% increase year-to-date, reaching $151.52. This impressive performance is further underscored by a 5-year total shareholder return nearing 370%, indicating strong upward momentum.
The company is on the cusp of a major growth phase, bolstered by the anticipated acquisition of ZT Systems. This strategic move is projected to inject $5 to $6 billion in annual run-rate revenue, positioning Sanmina to potentially double its net revenue within a three-year timeframe. This expansion is particularly poised to capitalize on the burgeoning demand within data center and AI infrastructure sectors.
Despite the optimistic outlook, with analysts targeting a share price of $190, some valuation models present a more cautious perspective. Sanmina's current earnings multiple is higher than the US Electronic industry average, raising questions about whether future growth is already priced in. Successful integration of ZT Systems and sustained demand from its customer base are critical factors for maintaining current growth trajectories.
