Sanmina Corporation (SANM) DCF Valuation & Fundamental Primer
Sanmina Corporation (SANM) currently trades at $150.07 with an enterprise value of $7.20B. Our proprietary institutional model rates Sanmina Corporation at 80/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 5.7% vs. historical growth of 4.8% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Sanmina Corporation (SANM) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Sanmina Corporation (SANM) 3-Scenario DCF Valuation Range
Stress-test SANM's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $150.07).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $263.25 +75% | $278.35 +85% | $295.98 +97% | $316.80 +111% | $341.79 +128% |
| 9.3% | $238.50 +59% | $250.40 +67% | $264.06 +76% | $279.91 +87% | $298.51 +99% |
| 10.0% | $218.13 +45% | $227.70 +52% | $238.54 +59% | $250.93 +67% | $265.23 +77% |
| 10.8% | $201.07 +34% | $208.89 +39% | $217.66 +45% | $227.57 +52% | $238.83 +59% |
| 11.5% | $186.58 +24% | $193.07 +29% | $200.27 +33% | $208.33 +39% | $217.39 +45% |
Institutional Software Quality Scorecard (80/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 135% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 0.0% of revenue
- Net cash positive: $625.8M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (8.8%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into SANM?
Market implies 5.7% annual revenue growth over next 5 years (5.2% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (0.0% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 5.2% 5-year revenue CAGR to justify $150.07/sh on a true per-share economic cash flow basis.
Sanmina Corporation (SANM) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $8.13B | $8.13B | $8.52B | $8.93B | $9.36B | $9.81B | $10.28B |
| Gross Profit | $716.4M | $716.1M | $750.5M | $786.5M | $824.3M | $863.8M | $905.3M |
| Operating Income (EBIT) | $354.6M | $354.4M | $371.4M | $389.2M | $407.9M | $427.5M | $448.0M |
| Stock-Based Compensation (SBC) | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Unlevered Free Cash Flow (FCF) | $478.2M | $477.9M | $500.9M | $524.9M | $550.1M | $576.5M | $604.2M |
| SBC-Adjusted True Cash Flow | $478.2M | $477.9M | $500.9M | $524.9M | $550.1M | $576.5M | $604.2M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -5.3 + 0.34 × (Rule of 40) · R² = 67%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Sanmina Corporation | SANM | $8.10B | $8.13B | 8.8% | 5.9% | 10.7% | — | 0.9× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 0.9× | $7.47B | $8.10B | $150.07 | 0.0% |
| -20% Multiple Compression | 0.7× | $5.98B | $6.60B | $122.38 | -20.0% |
| -35% Multiple Compression | 0.6× | $4.86B | $5.48B | $101.61 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $40.64B | $41.27B | $764.97 | +444.1% |
Frequently Asked Questions: Sanmina Corporation (SANM) Valuation
What is Sanmina Corporation (SANM)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Sanmina Corporation (SANM) has a Base Case implied value of $145.04 per share (with a Bear Case of $89.71 and a Bull Case of $205.94), compared to its current price of $150.07. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Sanmina Corporation (SANM)'s Rule of 40 score and Free Cash Flow margin?
Sanmina Corporation achieves a Rule of 40 score of 10.7%, combining a 4.8% revenue growth run-rate with a 5.9% TTM free cash flow margin on $8.13B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into SANM stock according to Reverse-DCF analysis?
At $150.07 per share (Enterprise Value of $7.47B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 5.7%, compared to Sanmina Corporation's historical CAGR of 4.8%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Sanmina Corporation compare to Software & Cloud Services software peers?
Sanmina Corporation (SANM) earns an institutional Software Quality Score of 80/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Sanmina Corporation (SANM)'s valuation?
Sanmina Corporation recorded $0 in TTM stock-based compensation (15.0% of revenue). When treating SBC as a cash-equivalent compensation expense, Sanmina Corporation's SBC-adjusted free cash flow yield is 5.9%, scoring 25/25 on our Shareholder Dilution Friction pillar.