Can Sanmina's Thrust on 42Q Connected Manufacturing Boost Revenues?

Sanmina Corporation SANM is increasingly focusing on 42Q connected manufacturing that effectively integrates data from customers’ global factories and suppliers’ fleets and creates an up-to-date information base. It offers a unified data ecosystem with real-time data analytics capabilities that significantly improve visibility across the enterprise’s distributed manufacturing and accelerate the decision-making process. 

To elucidate, the unified data ecosystem consolidates product and operational supply data into a single manufacturing data lake, enabling faster planning and improved responsiveness to market and product changes. Real-time data analytics helps optimize shop floor inventory, reduce downtime and improve order flow. The 42Q connected manufacturing also offers enhanced quality monitoring for faster response to quality deviations, leading to reduced waste and better product reliability.

Sanmina has deployed the 42Q connected manufacturing in more than 70 factories across 15 countries, connecting more than 35,000 pieces of manufacturing equipment in the cloud. Such a technology-driven, customer-focused approach enables Sanmina to work closely with its customers to anticipate future manufacturing requirements and modify its R&D initiatives accordingly. Attracting and developing strong customer relationships by delivering high-level customer service is one of the key strategies to drive commercial expansion. Its vertically integrated manufacturing process streamlines processes and lowers costs, enabling Sanmina to achieve greater economies of scale.

How are Competitors Faring?

The company faces competition from Jabil, Inc. JBL and Celestica Inc. CLS in the electronic manufacturing services industry. Jabil’s revenues were $8.3 billion in the last reported quarter, up from $6.96 billion a year ago. Healthy demand in the healthcare & packaging, Capital Equipment, AI-related Cloud and Data Center Infrastructure verticals is driving growth. Jabil’s focus on end-market and product diversification is a key catalyst.

Celestica reported quarterly revenues of $3.19 billion, up 27.8% year over year. Solid growth in the hardware platform solutions portfolio, backed by hyperscale customer demand for networking products, including 400G switches and 800G switches, is driving growth. Increasing AI-driven data center investments across industries boast a solid growth potential for Celestica.

SANM’s Price Performance, Valuation and Estimates

Sanmina has gained 104.1% over the past year compared with the industry’s growth of 105%

From a valuation standpoint, Sanmina trades at a forward price-to-sales ratio of 0.58, below the industry tally of 0.89.

The Zacks Consensus Estimate for Sanmina’s earnings for 2025 has moved northward over the past 60 days (up 38.9%).

Sanmina currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research