SMART Global Shares Soar Following Quarterly Beat, Analyst Confidence

SMART Global Holdings Inc (NASDAQ:SGH) reported fourth-quarter FY21 revenue of $467.7 million, up 57% year-on-year, beating the consensus of $461.3 million. The adjusted EPS of $2.16 beat the consensus of $1.60.
SMART Global sees Q1 FY22 revenue of $440 million – $480 million versus the consensus of $458.55 million. It expects EPS of $1.80 – $2.20 above the consensus of $1.49.
The analysts raised their price targets on the stock following the Q4 earnings growth.
Needham analyst Rajvindra Gill maintained a Buy and raised the PT from $75 to $85, implying a 94.02% upside.
Deutsche Bank analyst Sidney Ho raised the PT to $70 from $66, implying a 59.8% upside, and reiterated a Buy.
The analyst says that while revenue was generally in line with his expectations, he’s most impressed with SGH’s gross margin improvement.
Commentary from the company suggests the improvement is sustainable with potential for upside to the new target range, Ho notes.
The analyst is “encouraged with the transformation story” of SGH and sees potential for the stock to re-rate higher.
SMART Global is a designer and manufacturer of electronic products focused on memory and computing technology areas.
Price Action: SGH shares traded higher by 10.9% at $48.59 in the premarket session on the last check Wednesday.