A strong stock as of late has been Sanmina (SANM). Shares have been marching higher, with the stock up 70.6% over the past month. The stock hit a new 52-week high of $238.75 in the previous session. Sanmina has gained 59% since the start of the year compared to the 15% gain for the Zacks Computer and Technology sector and the 53.6% return for the Zacks Electronics - Manufacturing Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each 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). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. 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 B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 21.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 31.6X. On a trailing cash flow basis, the stock currently trades at 31.6X versus its peer group's average of 28.1X. Additionally, the stock has a PEG ratio of 0.76. 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 consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Sanmina currently has a Zacks Rank of #1 (Strong Buy) thanks to a solid earnings estimate revision trend.
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 still be poised for more gains ahead.
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 A.
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 29.1% over the past month, and currently trade at a forward P/E of 40.74X and a P/CF of 57.73X.
The Electronics - Manufacturing Services industry is in the top 9% 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).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
