Needham & Company LLC reiterated their hold rating on shares of Smart Global (NASDAQ:SGH) in a research note published on Wednesday morning, MarketBeat.com reports.
“We downgrade Strong Buy. We had anticipated that the local content rules would increase to 60% in CY19 from 50% driving overall unit growth. However, several of SGH’s largest smartphone customers (Samsung, LG) have pushed out memory purchases because of declining memory prices and the fact they overbought in the C1H18 when there were memory shortages. As a result, local content rules will remain at 50% throughout CY19 and consequently we forecast Brazil (51% of sales) to decline 20-25% in FY19. Moreover, the Brazil segment operated at the corporate gross margin, so a revenue mix shift will cause the margin to decline to 18-19% (vs. 21-23%). Given the lack of mobile growth and a steep cut to estimates, we move to the sidelines until local content rules increase to 60% and margins stabilize.”,” the firm’s analyst wrote.
Other equities research analysts also recently issued reports about the company. Zacks Investment Research upgraded Smart Global from a hold rating to a buy rating and set a $32.00 target price on the stock in a report on Thursday, October 11th. Roth Capital dropped their target price on Smart Global from $70.00 to $60.00 and set a buy rating on the stock in a report on Friday, October 5th. Deutsche Bank dropped their target price on Smart Global from $60.00 to $50.00 and set a buy rating on the stock in a report on Friday, October 5th. Stifel Nicolaus raised their target price on Smart Global from $61.00 to $62.00 and gave the company a buy rating in a report on Friday, October 5th. Finally, ValuEngine upgraded Smart Global from a sell rating to a hold rating in a report on Saturday, December 1st. Two equities research analysts have rated the stock with a sell rating, two have given a hold rating and four have assigned a buy rating to the stock. The company presently has a consensus rating of Hold and an average target price of $47.50.
Smart Global (NASDAQ:SGH) last announced its earnings results on Tuesday, January 8th. The company reported $1.60 EPS for the quarter, missing the consensus estimate of $1.77 by ($0.17). The company had revenue of $393.90 million for the quarter, compared to analysts’ expectations of $382.23 million. Smart Global had a net margin of 9.13% and a return on equity of 83.61%. The business’s quarterly revenue was up 48.4% compared to the same quarter last year. During the same quarter in the previous year, the business posted $1.05 earnings per share. On average, equities analysts forecast that Smart Global will post 6.61 earnings per share for the current year.
In other Smart Global news, Director Iain Mackenzie sold 98,797 shares of Smart Global stock in a transaction that occurred on Monday, November 19th. The stock was sold at an average price of $30.52, for a total transaction of $3,015,284.44. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, Director Mukesh Patel sold 39,339 shares of Smart Global stock in a transaction that occurred on Monday, October 15th. The stock was sold at an average price of $31.86, for a total value of $1,253,340.54. The disclosure for this sale can be found here. Insiders have sold a total of 282,482 shares of company stock worth $8,813,724 over the last 90 days. 4.20% of the stock is owned by company insiders.
A number of hedge funds have recently bought and sold shares of SGH. Hillcrest Asset Management LLC bought a new stake in shares of Smart Global in the 2nd quarter valued at approximately $3,624,000. Oppenheimer & Co. Inc. bought a new stake in shares of Smart Global in the 2nd quarter valued at approximately $285,000. Paloma Partners Management Co bought a new stake in shares of Smart Global in the 3rd quarter valued at approximately $211,000. BlackRock Inc. increased its holdings in shares of Smart Global by 20.7% in the 2nd quarter. BlackRock Inc. now owns 669,382 shares of the company’s stock valued at $21,333,000 after acquiring an additional 114,901 shares during the last quarter. Finally, BlueMountain Capital Management LLC bought a new stake in shares of Smart Global in the 2nd quarter valued at approximately $665,000. Institutional investors own 83.06% of the company’s stock.
About Smart Global
SMART Global Holdings, Inc designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements.
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