Why Is Sanmina (SANM) Down 5.8% Since Last Earnings Report?

A month has gone by since the last earnings report for Sanmina (SANM). Shares have lost about 5.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Sanmina due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Sanmina Corporation before we dive into how investors and analysts have reacted as of late.

Sanmina Q4 Earnings Surpass Estimates, Revenues Rise Y/Y

Sanmina reported strong fourth-quarter fiscal 2025 results, with both the top and bottom lines surpassing the Zacks Consensus Estimate.

This California-based global electronics manufacturing services provider reported revenue growth year over year, owing to solid momentum across multiple end markets. Strong growth in free cash flow is a positive.

Net Income

Net income on a GAAP basis in the quarter was $48.1 million or 88 cents per share compared with $61.4 million or $1.09 per share in the prior-year quarter. Despite top-line growth, higher operating expenses and higher income taxes impacted the bottom line.

Non-GAAP net income in the reported quarter was $91.5 million or $1.67 per share compared with $80.3 million or $1.43 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.57.

In 2025, the company reported a GAAP net income of $245.9 million or $4.46 per share compared to $222.5 million or $3.91 per share in 2024. Non-GAAP net income was $333.2 million or $6.04 per share compared to $300.9 million or $5.28 per share in 2024.

Revenues

Net sales during the quarter increased to $2.09 billion from $2.01 billion reported in the year-ago quarter, primarily driven by growth across multiple end markets. The top line beat the consensus estimate by $46 million.

For 2025, revenues increased to $8.13 billion from $7.56 billion in 2024
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In the fiscal fourth quarter, Integrated Manufacturing Solutions generated $1.68 billion in revenues, up 3.3% year over year. The segment contributed 80.2% to revenues. Solid sales growth was primarily driven by the communications networks, cloud and AI infrastructure end markets.

Components, Products and Services revenues increased to $448 million, up 7.3% year over year, backed by growth in several end markets.

End-market-wise, Industrial & Energy, Medical, Defense & Aerospace, and Automotive markets generated $1.247 billion in revenues, down from $1.253 billion. The company generated $849 million from Communications Networks and Cloud Infrastructure, up from $765 million a year ago.

Other Details

Non-GAAP gross profit was $196.4 million compared with $175.5 million in the year-ago quarter. The improvement is driven by a favorable mix and improved operational efficiency. Non-GAAP operating income totaled $126.4 million compared with $107.3 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 fourth quarter of fiscal 2025, Sanmina generated $199.1 million of net cash from operating activities compared with $51.9 million in the previous year’s quarter. In 2025, the company generated $620.7 million in cash compared to $340.2 million in 2024. As of Sept. 27, 2025, the company had $926.3 million in cash and cash equivalents and $282.3 million in long-term debt. In 2025, it repurchased approximately 1.44 million shares for roughly $113.7 million.

Outlook

For the first quarter of fiscal 2026, revenues are expected to be in the range of $2.05-$2.15 billion. Management estimates non-GAAP earnings per share in the band of $1.95-$2.25. Non-GAAP operating margin is expected in the band of 5.6-6.1%.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 22.76% due to these changes.

VGM Scores

At this time, Sanmina has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.

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

Outlook

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

Performance of an Industry Player

Sanmina is part of the Zacks Electronics - Manufacturing Services industry. Over the past month, Plexus (PLXS), a stock from the same industry, has gained 4.2%. The company reported its results for the quarter ended September 2025 more than a month ago.

Plexus reported revenues of $1.06 billion in the last reported quarter, representing a year-over-year change of +0.7%. EPS of $2.14 for the same period compares with $1.85 a year ago.

For the current quarter, Plexus is expected to post earnings of $1.77 per share, indicating a change of +2.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Plexus. Also, the stock has a VGM Score of A.

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

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