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1. Company Snapshot

1.a. Company Description

SMART Global Holdings, Inc.designs and manufactures specialty solutions for the computing, memory, and LED markets in the United states, Brazil, China, Europe, and internationally.It operates through Memory Solutions, Intelligent Platforms Solutions, and LED Solutions segments.


The company offers dynamic random access memory modules for desktops, notebooks, servers, and smartphones; embedded and removable flash memory products; and flash component products.It also provides supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging.In addition, the company offers Penguin Computing solutions to customers in financial services, energy, government, social media, and education end markets; Penguin Edge solutions to government, telecommunications, health care, smart city, network edge, and industrial applications; and hardware and software products, including solutions based on the Open Compute Project.


Further, it provides servers, software, integrated turn-key clusters, enterprise-grade storage, and networking in hardware or cloud-based solutions through Penguin-On-Demand; Open Compute Tundra Extreme Scale products; turn-key storage solutions; and rackmount servers and GPU accelerated computing platforms.Additionally, the company's LED Solutions offers application-optimized LEDs for lighting, video screens, and specialty lighting applications under the CreeLED brand.It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers.


The company was formerly known as Saleen Holdings, Inc.and changed its name to SMART Global Holdings, Inc.in August 2014.


SMART Global Holdings, Inc.was founded in 1988 and is headquartered in Newark, California.

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1.b. Last Insights on SGH

SMART Global Holdings' recent performance was negatively driven by the company's repositioning efforts, which have led to increased competition and macro headwinds. The company's Q3 results showed a decline in sales, partly offset by a strong earnings beat. Additionally, the company's convertible notes offering and strategic investment from SK Telecom may have contributed to the negative sentiment.

1.c. Company Highlights

2. Penguin Solutions' Q4 Results Exceed Expectations, Driven by AI Infrastructure Growth

Penguin Solutions reported a strong fourth quarter, with revenue reaching $338 million, a 9% increase year-over-year. Non-GAAP gross margin was 30.9%, and non-GAAP operating income was $39 million, a 16% increase year-over-year. Non-GAAP diluted EPS was $0.43, up 18% from the prior year, slightly missing estimates of $0.4 is not the actual estimate but the actual eps came out at '0.37' is not our case here as actual was 0.43. For the full year, revenue grew 17% year-over-year, with non-GAAP gross margin at 31% and non-GAAP operating margin at 12.2%. Non-GAAP diluted EPS was $1.90, a 53% increase compared to fiscal 2024.

Publication Date: Oct -28

📋 Highlights
  • AI Infrastructure Transformation:: Achieved 17% top-line growth, 190 bps non-GAAP operating margin expansion, and 53% non-GAAP diluted EPS increase in 2025.
  • Strategic Partnerships & Investment:: Secured $200M investment from SK Telecom, formed alliances with NVIDIA, CDW, Insight, and Dell, and expanded advanced computing pipeline.
  • Financial Strength & Debt Refinancing:: Reduced net debt to $16M via refinancing, repurchased $113M of shares since 2022, and maintained $454M in cash reserves.
  • Market Expansion & Revenue Segments:: Advanced Computing revenue grew 17% YoY ($648M), while Integrated Memory revenue surged 30% YoY ($464M) in 2025.

Segment Performance

Advanced computing revenue for the fourth quarter was $138 million, up 4% sequentially, with full-year revenue at $648 million, reflecting 17% year-over-year growth. Integrated Memory revenue for the fourth quarter was $132 million, with full-year revenue at $464 million, representing a 30% increase. Optimized LED revenue for the fourth quarter was $67 million, with full-year revenue at $256 million, roughly flat year-over-year.

Guidance and Outlook

For fiscal '26, the company expects net sales to grow 6%, plus or minus 10% versus the prior year. The company anticipates net sales growth in Memory to be between 10% and 20% year-over-year, while Advanced Computing is expected to change between minus 15% and plus 15% year-over-year. Non-GAAP gross margin outlook for the full year is 29.5%, plus or minus 1 percentage point.

Valuation

Using the provided valuation metrics, Penguin Solutions has a P/E Ratio of 47.15, P/B Ratio of 2.01, and P/S Ratio of 0.88. The EV/EBITDA ratio is 12.48. With analysts estimating next year's revenue growth at 11.6%, the current valuation appears to be pricing in a significant level of growth. As Mark Adams stated, "we are in the early innings of broad enterprise rollouts," which may justify the premium valuation.

Conclusion on Financial Health

The company's cash, cash equivalents, and short-term investments totaled $454 million at the end of the fourth quarter. Operating cash flow from continuing operations was $113 million, an 8% increase from the prior fiscal year. The company's debt refinancing and reduced leverage also contribute to its strong financial position.

3. NewsRoom

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Cree LED Partners with IDC Componentes and Ilumiled to Brighten Downtown Querétaro Mexico

Oct -08

Source: businesswire.com

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SGH Announces Fourth Quarter and Full Year Fiscal 2024 Financial Conference Call

Sep -24

Source: businesswire.com

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SMART Global Holdings Announces Pricing of Upsized Private Offering of $175.0 Million Convertible Notes

Aug -02

Source: businesswire.com

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Cree LED Delivers 20% Efficiency Increase for XLamp XE-G LEDs

Aug -01

Source: businesswire.com

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Small-Cap Stocks Surge: 3 Tiny Titans Poised to Take Over in 2024

Jul -29

Source: investorplace.com

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SGH Announces $200 Million Strategic Investment from SK Telecom to Advance End-to-End AI Infrastructure Solutions

Jul -15

Source: businesswire.com

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Why Smart Global Stock Skyrocketed Today

Jul -10

Source: fool.com

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This Tech Stock Can Set a Multiyear High with AI-Powered Growth

Jul -10

Source: marketbeat.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.72%)

6. Segments

Intelligent Platform Solutions

Expected Growth: 7.5%

SMART Global Holdings' Intelligent Platform Solutions growth is driven by increasing demand for AI-enabled edge computing, IoT, and 5G infrastructure. The segment benefits from the company's strong presence in the industrial automation and aerospace markets, as well as its ability to provide customized solutions for high-performance computing and storage applications.

Memory Solutions

Expected Growth: 8.5%

Strong demand for memory-intensive AI, 5G, and IoT applications drives growth. Increasing adoption of cloud computing, big data, and edge computing also fuels demand. Additionally, SMART Global's strategic acquisitions and partnerships, such as its purchase of Cree's memory business, expand its product offerings and customer base, contributing to the 8.5% growth.

LED Solutions

Expected Growth: 7.0%

The 7.0% growth of LED Solutions from SMART Global Holdings, Inc. is driven by increasing demand for energy-efficient lighting, rising adoption of IoT and smart city initiatives, and growing need for customized LED solutions in industrial and automotive applications.

7. Detailed Products

Memory Modules

SMART Global Holdings, Inc. offers a wide range of memory modules, including DDR3, DDR4, DDR5, and LPDDR5, designed for various applications such as servers, data centers, and IoT devices.

Specialty Memory

The company provides specialty memory products, including flash-based memory, phase-change memory, and other specialized memory solutions for specific industries and applications.

Storage Products

SMART Global Holdings, Inc. offers a range of storage products, including solid-state drives (SSDs), hard disk drives (HDDs), and hybrid drives, designed for various applications such as data centers, servers, and client devices.

Brazilian Manufacturing Services

The company provides manufacturing services, including assembly, test, and packaging of electronic components, primarily for the Brazilian market.

Customized Solutions

SMART Global Holdings, Inc. offers customized solutions, including design, manufacturing, and logistics services, tailored to meet specific customer requirements.

8. SMART Global Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SMART Global Holdings, Inc. is medium due to the availability of alternative products and services in the market. While the company's products are highly specialized, customers may still opt for alternative solutions.

Bargaining Power Of Customers

The bargaining power of customers for SMART Global Holdings, Inc. is low due to the company's strong brand reputation and the lack of alternative suppliers. Customers have limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for SMART Global Holdings, Inc. is medium due to the company's dependence on a few key suppliers. While the company has some negotiating power, suppliers can still exert some pressure.

Threat Of New Entrants

The threat of new entrants for SMART Global Holdings, Inc. is high due to the relatively low barriers to entry in the industry. New companies can easily enter the market, posing a threat to the company's market share.

Intensity Of Rivalry

The intensity of rivalry for SMART Global Holdings, Inc. is high due to the highly competitive nature of the industry. The company faces intense competition from established players, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.39%
Debt Cost 3.95%
Equity Weight 20.61%
Equity Cost 12.93%
WACC 5.80%
Leverage 385.14%

11. Quality Control: SMART Global Holdings, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.5/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.85$

Current Price

20.85$

Potential

-0.00%

Expected Cash-Flows