Why has Sanmina (SANM) risen by 10.5% following its most recent earnings announcement?

Sanmina Stock Surges 10.5% Since Last Earnings Report

Over the past month, shares of Sanmina (SANM) have climbed approximately 10.5%, outpacing the S&P 500 index.

Will the Uptrend Continue?

Investors may be questioning whether this upward momentum will persist as the next earnings announcement approaches, or if a correction is on the horizon. To better understand the current situation, let's review Sanmina Corporation's most recent quarterly results and see how the market has responded.

First Quarter Fiscal 2026: Highlights

Sanmina Delivers Strong Q1 Results

Sanmina, a leading electronics manufacturer based in California, reported impressive results for the first quarter of fiscal 2026. Both revenue and earnings exceeded analyst expectations.

• Revenue: The company achieved a 59% year-over-year increase in revenue, reaching $3.19 billion compared to $2 billion in the same period last year. This growth was fueled by robust demand across several sectors and surpassed consensus estimates by $90 million.
• Net Income: On a GAAP basis, net income was $49.3 million, or $0.89 per share, down from $65 million, or $1.16 per share, a year ago. The decline was mainly due to higher operating expenses. However, non-GAAP net income rose to $132.4 million, or $2.38 per share, beating the consensus estimate of $2.15 and improving from $80.2 million, or $1.44 per share, in the prior year.
• Segment Performance:
  • The Integrated Manufacturing Solutions division generated $2.79 billion in revenue, up 72.2% year-over-year, accounting for 87.5% of total sales. This was driven by strong customer demand, increased orders, and better operational efficiency.
  • The Components, Products, and Services segment saw revenues rise 4.33% to $434 million, supported by growth in several end markets.
• End Market Breakdown: Revenue from Communications Networks and Cloud & AI Infrastructure jumped to $1.964 billion from $737 million, while sales from Industrial & Energy, Medical, Defense & Aerospace, and Automotive & Transportation slipped to $1.226 billion from $1.269 billion a year earlier.
• Profitability: Non-GAAP gross profit improved to $297.9 million from $180.1 million, thanks to higher sales, a better product mix, and cost controls. Non-GAAP operating income reached $192 million, up from $112.7 million, with the operating margin edging up to 6% from 5.6%.
• Cash Flow and Liquidity: Operating cash flow soared to $178.7 million from $63.9 million a year ago. As of December 27, 2025, Sanmina held $1.42 billion in cash and cash equivalents, with $2 billion in long-term debt. The company also repurchased 0.5 million shares for $79 million during the quarter.

Guidance for Q2 Fiscal 2026

For the second quarter, Sanmina anticipates revenue between $3.1 billion and $3.4 billion. Management expects non-GAAP earnings per share to range from $2.25 to $2.55, with an operating margin between 5.7% and 6.2%.

Recent Analyst Estimate Trends

Over the past month, analyst estimates for Sanmina have generally moved lower.

VGM Score Overview

• Growth: Sanmina earns an A for growth potential.
• Momentum: The company receives an F in momentum, indicating recent underperformance in this area.
• Value: With a B grade, Sanmina ranks in the second quintile for value investors.

Overall, the stock holds a composite VGM Score of B, making it attractive for investors seeking a balanced approach.

Looking Ahead

While analyst estimates have been revised downward, the scale of these changes remains encouraging. Sanmina currently carries a Zacks Rank #1 (Strong Buy), suggesting the potential for above-average returns in the coming months.