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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

We assign a fundamental rating of 3 out of 10 to SGH. SGH was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. SGH has a bad profitability rating. Also its financial health evaluation is rather negative. 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

SGH had positive earnings in the past year.
In the past year SGH had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: SGH reported negative net income in multiple years.
SGH had a positive operating cash flow in 4 of the past 5 years.
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 worse Return On Equity (-39.85%) than 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 (2.19%) which is comparable to the rest of the industry.
SGH's Operating Margin has declined in the last couple of years.
SGH has a Gross Margin of 33.50%. This is in the lower half of the industry: SGH underperforms 66.06% of its industry peers.
SGH's Gross Margin has improved in the last couple of years.
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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SGH is destroying value.
SGH has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the 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

SGH has an Altman-Z score of 1.81. This is a bad value and indicates that SGH is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of SGH (1.81) is comparable to the rest of the industry.
SGH has a debt to FCF ratio of 6.03. This is a slightly negative value and a sign of low solvency as SGH would need 6.03 years to pay back of all of its debts.
SGH has a Debt to FCF ratio (6.03) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.58 is on the high side and indicates that SGH has dependencies on debt financing.
The Debt to Equity ratio of SGH (1.58) is worse than 88.07% of its industry peers.
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

SGH has a Current Ratio of 2.68. This indicates that SGH is financially healthy and has no problem in meeting its short term obligations.
SGH has a Current ratio (2.68) which is comparable to the rest of the 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.
Looking at the Quick ratio, with a value of 2.18, SGH is in line with its industry, outperforming 51.38% of the companies in the same 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

SGH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -51.17%.
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

SGH is valuated correctly with a Price/Earnings ratio of 16.68.
Based on the Price/Earnings ratio, SGH is valued cheaply inside the industry as 87.16% of the companies are valued more expensively.
SGH's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.92.
A Price/Forward Earnings ratio of 10.74 indicates a reasonable valuation of SGH.
93.58% of the companies in the same industry are more expensive than SGH, based on the Price/Forward Earnings ratio.
SGH is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
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 40

4.2 Price Multiples

77.06% of the companies in the same industry are more expensive than SGH, based on the Enterprise Value to EBITDA ratio.
SGH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SGH is 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

SGH does not give a dividend.
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%