Shares of Sanmina (SANM) have been strong performers lately, with the stock up 20.7% over the past month. The stock hit a new 52-week high of $262.78 in the previous session. Sanmina has gained 73.2% since the start of the year compared to the 19.4% move for the Zacks Computer and Technology sector and the 49.8% return for the Zacks Electronics - Manufacturing Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 27, 2026, Sanmina reported EPS of $3.16 versus consensus estimate of $2.42.
For the current fiscal year, Sanmina is expected to post earnings of $11.22 per share on $14.27 in revenues. This represents a 85.76% change in EPS on a 75.51% change in revenues. For the next fiscal year, the company is expected to earn $13 per share on $16.73 in revenues. This represents a year-over-year change of 15.88% and 17.24%, respectively.
Valuation Metrics
Though Sanmina has recently hit a 52-week high, what is next for Sanmina? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Sanmina has a Value Score of C. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 32.2X. On a trailing cash flow basis, the stock currently trades at 34.4X versus its peer group's average of 28.9X. Additionally, the stock has a PEG ratio of 0.83. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Sanmina currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sanmina passes the test. Thus, it seems as though Sanmina shares could have potential in the weeks and months to come.
How Does SANM Stack Up to the Competition?
Shares of SANM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Celestica, Inc. (CLS). CLS has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Celestica, Inc. beat our consensus estimate by 3.85%, and for the current fiscal year, CLS is expected to post earnings of $10.16 per share on revenue of $19.06 billion.
Shares of Celestica, Inc. have gained 2.6% over the past month, and currently trade at a forward P/E of 36.51X and a P/CF of 51.73X.
The Electronics - Manufacturing Services industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SANM and CLS, even beyond their own solid fundamental situation.
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This article originally published on Zacks Investment Research (zacks.com).