Smart Global Holdings has formed a mean sideways consolidation or basing pattern on the chart.
Smart Global Holdings provides specialty memory solutions. The Company manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The Company also serves original equipment manufacturer (OEM), customers to develop memory solutions. You can find out more about the company on their website here.
Smart Global Holdings is likely to benefit from the strong global demand for memory. Mobile smartphone usage continues to rise on a global scale and phones continue to be built that are more powerful with greater memory capacity.
Smart Global Holdings Inc, on September 28, 2017, reported EPS of $0.79 versus the $0.64 estimate. Revenue also beat coming in at $223 million versus the $210.54 million estimate. The company’s quarterly revenue was up an incredible 52.5% year-over-year!
Just this week Deutsche Bank AG reiterated its Buy rating and price target of $35. Deutsche Bank analysts are the most widely followed on Wall Street because of their excellent track record. If Deutsche Bank gives a stock a Buy rating, it’s always worth checking it out.
Also this week we had Citigroup Inc. boost its price target to $35 as well. Citigroup has a Buy rating on the stock.
These big banking financial firms have access to Smart Global Holdings CEO and corporate officers and can do meetings with the company and thus they have greater access than you or I.
Overall the company has no Sell ratings, 6 Buy ratings, and 1 Strong Buy rating. The average target price is $34.36 which represents 11.6% upside from the current price.
That’s a pretty solid basing pattern which sort of puts a floor under SGH stock. Please review this stock trading lesson on basing patterns. SGH looks like a good setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. We notice that large players showed an interest for SGH in the last couple of days, which is a bullish sign.
Smart Global Holdings Review
SGH has negative profitability ratios, so we won't be analyzing them here. SGH has a Return On Assets of -1.64%. This is below the industry average of 3.39%. SGH's Profit Margin of -5.87% is worse than the rest of the industry. The industry average Profit Margin is 4.07%. The Piotroski-F score of SGH is 1. This is a very weak score and indicates problems in health and profitability for SGH.
Compared to an average industry Price/Earning Ratio of 24.69, SGH is valued a bit cheaper than its industry peers. The Forward Price/Earnings Ratio of 10.50 indicates a rather cheap valuation of SGH. SGH's low PEG Ratio, which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company. Compared to an average Enterprise Value to EBITDA ratio of 13.74, SGH is valued rather cheaply. On top of this, SGH has a better ratio than 82% of the companies listed in the same industry. The Price/Earnings Ratio is 14.68, which indicates a correct valuation of SGH. With a price book ratio of 23.26, SGH is valued rather expensively. Compared to an average industry price book ratio of 2.81, SGH is valued more expensive than its industry peers. 100% of the companies listed in the same industry are valued cheaper.
SGH is expected to show a strong growth in Earnings Per Share. In the coming 2 years, the EPS will grow by 24.16% yearly.
SGH has a Current Ratio of 1.42. This is a normal value and indicates that SGH is financially healthy and should not expect problems in meeting its short term obligations. An Altman-Z score of 2.35 indicates that SGH is not a great score, but indicates only limited risk for bankruptcy at the moment. When comparing the Current Ratio of SGH to the average industry Current Ratio of 2.85, SGH is less able to pay its short term obligations than its industry peers. 84% of its industry peers have a better Current Ratio. A Quick Ratio of 0.86 indicates that SGH may have some problems paying its short term obligations. When comparing the Quick Ratio of SGH to the average industry Current Ratio of 2.11, SGH is less able to pay its short term obligations than its industry peers. 89% of its industry peers have a better Quick Ratio. Compared to an average industry Debt to Equity Ratio of 0.19, SGH is requires more financing than its industry peers. 100% of its industry peers have a better Debt to Equity Ratio. When comparing the Altman-Z score of SGH to the average industry Altman-Z score of 3.24, SGH is less financially healthy than its industry peers. SGH has a very weak Piotroski-F score of 1. This is an indication of health and profitability issues for SGH.
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