U.S. markets close in 5 hours 26 minutes
  • S&P 500

    4,157.76
    +45.26 (+1.10%)
     
  • Dow 30

    34,282.67
    +261.22 (+0.77%)
     
  • Nasdaq

    13,348.26
    +223.27 (+1.70%)
     
  • Russell 2000

    2,203.86
    +32.91 (+1.52%)
     
  • Crude Oil

    64.95
    +1.13 (+1.77%)
     
  • Gold

    1,838.50
    +14.50 (+0.79%)
     
  • Silver

    27.50
    +0.44 (+1.61%)
     
  • EUR/USD

    1.2142
    +0.0057 (+0.47%)
     
  • 10-Yr Bond

    1.6340
    -0.0340 (-2.04%)
     
  • GBP/USD

    1.4094
    +0.0042 (+0.30%)
     
  • USD/JPY

    109.3890
    -0.0450 (-0.04%)
     
  • BTC-USD

    50,557.05
    -41.51 (-0.08%)
     
  • CMC Crypto 200

    1,408.75
    +50.19 (+3.69%)
     
  • FTSE 100

    7,025.61
    +62.28 (+0.89%)
     
  • Nikkei 225

    28,084.47
    +636.46 (+2.32%)
     

Why SMART Global Holdings, Inc. (SGH) Might be Well Poised for a Surge

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

SMART Global Holdings, Inc. (SGH) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For SMART Global Holdings, Inc. There has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $1.10 per share for the current quarter represents a change of +57.14% from the number reported a year ago.

Over the last 30 days, three estimates have moved higher for SMART Global Holdings, Inc. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 20.27%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $3.97 per share, representing a year-over-year change of +53.28%.

The revisions trend for the current year also appears quite promising for SMART Global Holdings, Inc. with three estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 13.41%.

Favorable Zacks Rank

Thanks to promising estimate revisions, SMART Global Holdings, Inc. currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on SMART Global Holdings, Inc. because of its solid estimate revisions, as evident from the stock's 21.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SMART Global Holdings, Inc. (SGH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research