SMART Global Continues To Show Brilliance As Its Q3 Financials Improve From Previous Quarter, Stock Up ~20%
The PRISM NextGen Tech Index is currently led by SMART Global Holdings (SGH) who announced their third quarter financial results that beat estimates on EPS ($0.37 vs FactSet $0.30) and slightly beat on Q3 revenues as well ($300.6M vs FactSet $300.0M). The memory-focused company increased its net sales by 5.5% from the previous quarter and posted GAAP gross margins of 29.6% which increased by 0.8% from the previous quarter. Shares are currently trading upwards of 20% on the day.
As it relates to its longer-term outlook, the company intends to maintain disaplined evaluation of acquisition opportunities, boost its flexibility in returning capital to shareholders through opportunistic share repurchases and formulate a strategy to retire debt as appropriate to maintain reasonable gross leverage.
On the call, the company cited the memory business has seen less volatility and slight growth is to be expected with a strong demand forecast for Q4 2024 and beyond. Additionally, the company expects gross margins to fluctuate due to a mix of hardware and software services sales. However, their Penguin product customer base expansion is progressing well, and new customers are steadily being added.
“We are pleased with our Q3 operating results and continued progress in our transformation into a high-performance, high-availability enterprise solutions company,” said Mark Adams, CEO of SGH. “Our customers are looking for a trusted deployment partner to help them solve the complexity of AI, and we feel we are well positioned with our portfolio of systems, software and managed services to enable their success,” concluded Adams.
