Assessing SMART Global Stock Ahead of Its Q3 Earnings

SMART Global Holdings, Inc. SGH is slated to report third-quarter fiscal 2024 results on Jul 9.

The company expects revenues of $300 million (+/- $25 million) for the fiscal third quarter. The Zacks Consensus Estimate for the same is pegged at $300 million, indicating a decline of 21.7% from the year-ago reported quarter.

SMART Global anticipates non-GAAP earnings per share of 30 cents (+/- 15 cents). The consensus mark for fiscal third-quarter earnings is pegged at 30 cents per share, suggesting a fall of 54.6% from the prior-year reported figure. The estimate has been unchanged over the past 30 days.

The company's earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once, the average surprise being 25.2%.

Factors to Consider

SMART Global's strong execution and solid momentum across Intelligent Platform Solutions are likely to have contributed well to its top-line growth in the fiscal third quarter.

Strengthening Penguin's cloud-based solutions and solutions focused on core, data center, AI and analytics are expected to have driven the company's customer momentum in the quarter under review.

In the fiscal third quarter, SMART Global expanded its OriginAI solution to include validated, pre-defined AI architectures. This is expected to have contributed to the top line of the company.

The solid adoption of its immersion cooling technology by major oil and gas customers for sustainable data centers is expected to have driven Penguin solutions' momentum.

Strong demand for core DDR3, DDR4 and Flash products is expected to have boosted SMART Global's presence in the networking, telecom and storage end markets.

The increasing adoption of CV94D products and solid momentum in design wins across horticulture, indoor sports lighting and road signage applications are anticipated to have been other tailwinds in the quarter under review.

However, a challenging global macroeconomic environment and high inflation are likely to have been concerning for SMART Global in the quarter-to-be-reported.

Weakening momentum across memory and LED solutions is expected to get reflected in the upcoming results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for SMART Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

SMART Global currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are some stocks worth considering, as our model shows that they have the right combination of elements to beat on earnings this reporting cycle.

Arista Networks ANET has an Earnings ESP of +0.29% and a Zacks Rank #2 at present.

ANET is scheduled to release second-quarter 2024 results on Jul 30. The Zacks Consensus Estimate for ANET's earnings is pegged at $1.93 per share, indicating growth of 22.15% from the year-ago quarter's reported figure.

Amphenol APH has an Earnings ESP of +3.70% and a Zacks Rank #1 at present.

APH is set to report its second-quarter 2024 results on Jul 24. The Zacks Consensus Estimate for APH's earnings is pegged at 41 cents per share, indicating growth of 13.9% from the year-ago quarter's reported figure.

Badger Meter BMI has an Earnings ESP of +1.18% and a Zacks Rank #2 at present.

BMI is scheduled to release second-quarter 2024 results on Jul 19. The Zacks Consensus Estimate for BMI's earnings is pegged at 98 cents per share, indicating growth of 28.95% from the year-ago quarter's reported figure.

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