Does SMART Global Holdings Inc. (SGH) offer a good opportunity for investors?

SMART Global Holdings Inc. (NASDAQ: SGH) stock fell -1.21% on Tuesday to $20.48 against a previous-day closing price of $20.73. With 0.66 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.53 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $21.10 whereas the lowest price it dropped to was $20.36. The 52-week range on SGH shows that it touched its highest point at $25.40 and its lowest point at $12.04 during that stretch. It currently has a 1-year price target of $24.83. Beta for the stock currently stands at 1.38.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SGH was up-trending over the past week, with a rise of 19.21%, but this was up by 32.39% over a month. Three-month performance surged to 23.52% while six-month performance rose 21.04%. The stock lost -12.10% in the past year, while it has gained 37.63% so far this year. A look at the trailing 12-month EPS for SGH yields 0.38 with Next year EPS estimates of 2.39. For the next quarter, that number is 0.40. This implies an EPS growth rate of 195.90% for this year and 3.10% for next year. EPS is expected to decline by -8.72% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 47.40%.

Float and Shares Shorts:

At present, 49.12 million SGH shares are outstanding with a float of 46.76 million shares on hand for trading. On Apr 27, 2023, short shares totaled 4.65 million, which was 9.48% higher than short shares on Mar 30, 2023. In addition to Mr. Mark W. Adams as the firm’s Pres, CEO & Director, Mr. Ken Rizvi serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 103.30% of SGH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 58.61% of SGH, in contrast to 42.73% held by mutual funds. Shares owned by individuals account for 10.28%. As the largest shareholder in SGH with 15.32% of the stake, BlackRock Fund Advisors holds 7,515,773 shares worth 7,515,773. A second-largest stockholder of SGH, Columbia Management Investment Ad, holds 5,844,737 shares, controlling over 11.91% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in SGH, holding 4,583,211 shares or 9.34% stake. With a 7.26% stake in SGH, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 3,561,198 shares are owned by the mutual fund manager. The Columbia Seligman Technology & In, which owns about 6.19% of SGH stock, is the second-largest Mutual Fund holder. It holds 3,039,096 shares valued at 46.86 million. Vanguard Total Stock Market ETF holds 2.87% of the stake in SGH, owning 1,409,909 shares worth 21.74 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Feb 23, 2023, SGH reported revenue of $462.54M and operating income of $35.43M. The EBITDA in the recently reported quarter was $54.16M and diluted EPS was $0.44.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SGH since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With SGH analysts setting a high price target of $38.00 and a low target of $19.00, the average target price over the next 12 months is $24.83. Based on these targets, SGH could surge 85.55% to reach the target high and fall by -7.23% to reach the target low. Reaching the average price target will result in a growth of 21.24% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded SGH stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 16 while that of sell transactions has risen to 29 over the past year. The total number of shares bought during that period was 252,920 while 221,979 shares were sold.

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