February 4, 2023

SMART Global Q1 Earnings Preview: Great Expectations


SMART Global Holdings (NASDAQ:SGH), a semiconductor chip manufacturer, is scheduled to release its fiscal first-quarter 2022 upcoming earnings on January 4.

SMART was formerly a dependable pure-play memory leader in the semiconductor industry, but the business has recently expanded its product line. The company has split into three divisions: Intelligent Platform Solutions (IPS), LED Solutions, and Memory Solutions, and is no longer reliant on its Brazil Memory branch.

The company’s stock has risen about 84% in the last year and is now trading at over $70. Solid Q1 results might boost the stock price, so let’s take a closer look at what Wall Street experts are forecasting.

Analysts, on average, expect SMART Global to post adjusted earnings of $2.00 per share and revenues of $460.09 million for fiscal Q1.

Prior Quarter Snapshot

SMART Global reported solid fiscal fourth-quarter financial results, exceeding expectations on both the top and bottom lines.

Revenues grew by 57% to $467.7 million, much above expert estimates of $461.3 billion.

Meanwhile, adjusted earnings of $2.16 per share increased by 163.4% year-over-year and above Street projections of $1.60 per share.

Analyst’s View on Q1 Results

Ahead of the fiscal first-quarter earnings announcement, a Top Analyst, Kevin Cassidy of Rosenblatt Securities, identified SMART Global as one of his “top three long ideas for 2022.”

The company’s diversification and acquisition plans continue to inspire the analyst, who predicted “another beat-n-raise earnings report” in Q1. He also expects high sales and gross margins, thanks to “slightly increasing semiconductor component availability, “robust data center” and stronger “networking demand.”

In all, Cassidy wrote, “SGH continues to be an underappreciated name. He further added, “We expect continued revenue and earnings outperformance will justify an upwardly revised valuation by the market.”

As a result, Cassidy maintained his Buy rating on the company and increased the price target to $100 from $75, which implies an upside of almost 41% by the end of next year.

Analyst Rating Consensus

On TipRanks, Smart Global stock commands a Strong Buy consensus rating based on 5 unanimous Buys. As for price targets, the average SGH stock price prediction of $79.40 implies almost 11.9% upside potential from the current levels.

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Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.

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