Smart Global Holdings Inc (SGH)

Smart Global Holdings Inc (SGH) stock declined by 24.07% due to the company's first-quarter results missing Wall Street's expectations.

• Earnings Report Disappointments: While the company's earnings per share (EPS) surpassed expectations, its revenue fell short, leading to a decline in its operating margin. Additionally, SGH provided weak revenue guidance for the next quarter, further disappointing analysts. Key financial metrics: SGH posted revenues of $284.8 million, slightly missing analyst projections of $307.8644 million. The company reported a GAAP net loss of $13.62 million, diverging from the estimated net income of $15.4515 million. Non-GAAP EPS of $0.27 closely aligned with analyst estimates of $0.284. GAAP gross margin declined to 28.8% from 30.2% in the previous quarter, while non-GAAP gross margin also saw a decrease to 31.5%.
• *Leadership Change: As part of its earnings release, SGH announced the appointment of Pete Manca as President of its Intelligent Platform Solutions segment. Manca, previously a Senior Vice President and General Manager at Dell Technologies, brings significant industry experience to his new role at SGH.
• Market Reaction: The overall reaction to SGH's quarterly results was mixed, with the weak revenue outlook likely contributing to the significant drop in its stock price. This reaction underscores the stock market's tendency to overreact to news, leading to substantial price movements.

Smart Global Holdings (SGH) dropped by 44.44% from $23.58 to $13.10 in the trading on Friday October 13, 2023. The reason why SGH stock down today is due to the disappointing Q4 results and weak forward guidance for Q1, citing a challenging global economic environment.

• Net sales from continuing operations declined by 12.6% year over year to $316.7 million.
• Adjusted earnings per share of $0.35, missing consensus for earnings of $0.46 per share and revenue of $375 million.
• Q1 guidance of $275M to $300M in revenue and adjusted EPS of $0.15, fell short of analyst estimates of $384.7M and $0.40 per share.