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SMART GLOBAL HOLDINGS INC (SGH) Stock Fundamental Analysis

NASDAQ:SGH - Nasdaq - KYG8232Y1017 - Common Stock - Currency: USD

20.85  +0.09 (+0.43%)

After market: 21 +0.15 (+0.72%)

Fundamental Rating

3

SGH gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. SGH may be in some trouble as it scores bad on both profitability and health. SGH is cheap, but on the other hand it scores bad on growth.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year SGH was profitable.
SGH had a positive operating cash flow in the past year.
In multiple years SGH reported negative net income over the last 5 years.
Of the past 5 years SGH 4 years had a positive operating cash flow.
SGH Yearly Net Income VS EBIT VS OCF VS FCFSGH Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M

1.2 Ratios

SGH's Return On Assets of -10.91% is on the low side compared to the rest of the industry. SGH is outperformed by 73.39% of its industry peers.
SGH has a Return On Equity of -39.85%. This is in the lower half of the industry: SGH underperforms 78.90% of its industry peers.
SGH has a Return On Invested Capital (1.48%) which is in line with its industry peers.
Industry RankSector Rank
ROA -10.91%
ROE -39.85%
ROIC 1.48%
ROA(3y)-2.21%
ROA(5y)0.1%
ROE(3y)-19.83%
ROE(5y)-8.22%
ROIC(3y)N/A
ROIC(5y)N/A
SGH Yearly ROA, ROE, ROICSGH Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500 -500 1K 1.5K

1.3 Margins

SGH has a Operating Margin of 2.19%. This is comparable to the rest of the industry: SGH outperforms 47.71% of its industry peers.
SGH's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 33.50%, SGH is doing worse than 66.06% of the companies in the same industry.
In the last couple of years the Gross Margin of SGH has grown nicely.
Industry RankSector Rank
OM 2.19%
PM (TTM) N/A
GM 33.5%
OM growth 3Y-15.35%
OM growth 5Y-28.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y14.32%
GM growth 5Y4.95%
SGH Yearly Profit, Operating, Gross MarginsSGH Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SGH is destroying value.
There is no outstanding debt for SGH. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
SGH Yearly Shares OutstandingSGH Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 10M 20M 30M 40M 50M
SGH Yearly Total Debt VS Total AssetsSGH Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B

2.2 Solvency

Based on the Altman-Z score of 1.81, we must say that SGH is in the distress zone and has some risk of bankruptcy.
SGH has a Altman-Z score (1.81) which is comparable to the rest of the industry.
The Debt to FCF ratio of SGH is 6.03, which is on the high side as it means it would take SGH, 6.03 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 6.03, SGH perfoms like the industry average, outperforming 53.21% of the companies in the same industry.
A Debt/Equity ratio of 1.58 is on the high side and indicates that SGH has dependencies on debt financing.
With a Debt to Equity ratio value of 1.58, SGH is not doing good in the industry: 88.07% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.58
Debt/FCF 6.03
Altman-Z 1.81
ROIC/WACC0.13
WACC11.52%
SGH Yearly LT Debt VS Equity VS FCFSGH Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M

2.3 Liquidity

A Current Ratio of 2.68 indicates that SGH has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.68, SGH is in line with its industry, outperforming 46.79% of the companies in the same industry.
SGH has a Quick Ratio of 2.18. This indicates that SGH is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of SGH (2.18) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 2.68
Quick Ratio 2.18
SGH Yearly Current Assets VS Current LiabilitesSGH Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

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3

3. Growth

3.1 Past

The earnings per share for SGH have decreased strongly by -51.17% in the last year.
Measured over the past years, SGH shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.74% on average per year.
EPS 1Y (TTM)-51.17%
EPS 3Y-21.66%
EPS 5Y-5.74%
EPS Q2Q%5.71%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-1.74%

3.2 Future

The Earnings Per Share is expected to grow by 57.50% on average over the next years. This is a very strong growth
Based on estimates for the next years, SGH will show a quite strong growth in Revenue. The Revenue will grow by 14.97% on average per year.
EPS Next Y55.36%
EPS Next 2Y57.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year15.97%
Revenue Next 2Y14.97%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
SGH Yearly Revenue VS EstimatesSGH Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 500M 1B 1.5B
SGH Yearly EPS VS EstimatesSGH Yearly EPS VS EstimatesYearly EPS VS Estimates 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3

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8

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 16.68, which indicates a correct valuation of SGH.
Compared to the rest of the industry, the Price/Earnings ratio of SGH indicates a rather cheap valuation: SGH is cheaper than 87.16% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.52. SGH is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 10.74 indicates a reasonable valuation of SGH.
SGH's Price/Forward Earnings ratio is rather cheap when compared to the industry. SGH is cheaper than 93.58% of the companies in the same industry.
SGH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.25.
Industry RankSector Rank
PE 16.68
Fwd PE 10.74
SGH Price Earnings VS Forward Price EarningsSGH Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

SGH's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SGH is cheaper than 77.06% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SGH is valued cheaper than 96.33% of the companies in the same industry.
Industry RankSector Rank
P/FCF 9.97
EV/EBITDA 15.46
SGH Per share dataSGH EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

4.3 Compensation for Growth

SGH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SGH's earnings are expected to grow with 57.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.3
PEG (5Y)N/A
EPS Next 2Y57.5%
EPS Next 3YN/A

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0

5. Dividend

5.1 Amount

No dividends for SGH!.
Industry RankSector Rank
Dividend Yield N/A

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SMART GLOBAL HOLDINGS INC

NASDAQ:SGH (10/14/2024, 8:00:02 PM)

After market: 21 +0.15 (+0.72%)

20.85

+0.09 (+0.43%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)10-15 2024-10-15/amc
Earnings (Next)01-07 2025-01-07/amc
Inst Owners106.85%
Inst Owner Change3.21%
Ins Owners2.97%
Ins Owner Change0%
Market Cap1.10B
Analysts82.5
Price Target25.76 (23.55%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.03%
Min EPS beat(2)5.25%
Max EPS beat(2)20.8%
EPS beat(4)3
Avg EPS beat(4)13.25%
Min EPS beat(4)-23.62%
Max EPS beat(4)50.56%
EPS beat(8)7
Avg EPS beat(8)25.01%
EPS beat(12)11
Avg EPS beat(12)22.84%
EPS beat(16)15
Avg EPS beat(16)20.03%
Revenue beat(2)0
Avg Revenue beat(2)-0.71%
Min Revenue beat(2)-0.8%
Max Revenue beat(2)-0.63%
Revenue beat(4)0
Avg Revenue beat(4)-4.77%
Min Revenue beat(4)-16.4%
Max Revenue beat(4)-0.63%
Revenue beat(8)2
Avg Revenue beat(8)-14.27%
Revenue beat(12)5
Avg Revenue beat(12)-17.13%
Revenue beat(16)7
Avg Revenue beat(16)-12.62%
PT rev (1m)-21.71%
PT rev (3m)-21.71%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)6.91%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.25%
Valuation
Industry RankSector Rank
PE 16.68
Fwd PE 10.74
P/S 1.08
P/FCF 9.97
P/OCF 8.75
P/B 2.61
P/tB 8.48
EV/EBITDA 15.46
EPS(TTM)1.25
EY6%
EPS(NY)1.94
Fwd EY9.31%
FCF(TTM)2.09
FCFY10.03%
OCF(TTM)2.38
OCFY11.43%
SpS19.33
BVpS8
TBVpS2.46
PEG (NY)0.3
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -10.91%
ROE -39.85%
ROCE 1.88%
ROIC 1.48%
ROICexc 2.43%
ROICexgc 4.08%
OM 2.19%
PM (TTM) N/A
GM 33.5%
FCFM 10.81%
ROA(3y)-2.21%
ROA(5y)0.1%
ROE(3y)-19.83%
ROE(5y)-8.22%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-21.97%
ROICexcg growth 5Y-31.04%
ROICexc growth 3Y-26.35%
ROICexc growth 5Y-36.32%
OM growth 3Y-15.35%
OM growth 5Y-28.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y14.32%
GM growth 5Y4.95%
F-Score5
Asset Turnover0.66
Health
Industry RankSector Rank
Debt/Equity 1.58
Debt/FCF 6.03
Debt/EBITDA 8
Cap/Depr 25.48%
Cap/Sales 1.52%
Interest Coverage 250
Cash Conversion 151.34%
Profit Quality N/A
Current Ratio 2.68
Quick Ratio 2.18
Altman-Z 1.81
F-Score5
WACC11.52%
ROIC/WACC0.13
Cap/Depr(3y)70.28%
Cap/Depr(5y)82.85%
Cap/Sales(3y)3.33%
Cap/Sales(5y)3.12%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-51.17%
EPS 3Y-21.66%
EPS 5Y-5.74%
EPS Q2Q%5.71%
EPS Next Y55.36%
EPS Next 2Y57.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-1.74%
Revenue Next Year15.97%
Revenue Next 2Y14.97%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y135.94%
EBIT growth 3Y-7.99%
EBIT growth 5Y-26.9%
EBIT Next Year-3.8%
EBIT Next 3Y13.3%
EBIT Next 5YN/A
FCF growth 1Y16.19%
FCF growth 3Y5.85%
FCF growth 5Y9.02%
OCF growth 1Y-4.51%
OCF growth 3Y6.18%
OCF growth 5Y8.98%