Electronics manufacturing services company Sanmina (NASDAQ: SANM) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 102% year on year to $4.01 billion. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $3.35 billion was less impressive, coming in 4.7% below expectations. Its non-GAAP profit of $3.16 per share was 31.8% above analysts’ consensus estimates.

Is now the time to buy Sanmina? Find out by accessing our full research report, it’s free.

"We delivered great results for the second quarter. Revenue, non-GAAP operating margin and non-GAAP diluted EPS all exceeded our outlook," stated Jure Sola, Chairman and CEO of Sanmina Corporation.

Company Overview

Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Sanmina grew its sales at a solid 10.2% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Sanmina’s annualized revenue growth of 19.3% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Sanmina reported magnificent year-on-year revenue growth of 102%, and its $4.01 billion of revenue beat Wall Street’s estimates by 22.8%. Company management is currently guiding for a 64.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 31.5% over the next 12 months, an improvement versus the last two years. This projection is eye-popping for a company of its scale and suggests its newer products and services will catalyze better top-line performance.

WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.

This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.

Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Sanmina’s operating margin has more or less stayed the same over the last 12 months , averaging 4.5% over the last five years. This profitability was lousy for an industrials business and caused by its suboptimal cost structureand low gross margin.

Analyzing the trend in its profitability, Sanmina’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q1, Sanmina generated an operating margin profit margin of 3.9%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sanmina’s EPS grew at 17% compounded annual growth rate over the last five years, higher than its 10.2% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

We can take a deeper look into Sanmina’s earnings quality to better understand the drivers of its performance. A five-year view shows that Sanmina has repurchased its stock, shrinking its share count by 17.7%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Sanmina, its two-year annual EPS growth of 25.3% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q1, Sanmina reported adjusted EPS of $3.16, up from $1.41 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sanmina’s full-year EPS of $8.74 to grow 25.4%.

Key Takeaways from Sanmina’s Q1 Results

It was good to see Sanmina beat analysts’ EPS expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed and its EBITDA fell short of Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 11.4% to $209.47 immediately following the results.

Sanmina put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).