Shares of SMART Global Holdings, Inc. (SGH) have gained another 18% today, adding to an impressive rally through 2024 thus far. The stock is now closing in on a 50% gain year-to-date.

Today’s lift is all thanks to a third-quarter earnings report in which the company beat analyst expectations on both the top and bottom lines. Here are the results:

  • Earnings per share: 37 cents compared to 30 cents consensus
  • Sales: $300.6 million compared to $300 million consensus

SMART also improved its profitability, with a slight gross margin boost to 32.3% compared to the previous quarter’s figure of 31.5%. 

CEO Mark Adams says that he and the rest of the team are pleased with these results and the trajectory the company is on for transforming into a high-performance, high-availability enterprise solutions company.

Customers are seeking a partner they can trust to help them deploy and maximize the benefits of AI, which is highly complex. SMART fills that need perfectly through a portfolio of systems, software, and managed services.

The company expects to continue its pace in the current quarter, with a Q4 outlook of 40 cents per share (give or take 15 cents) and sales of $325 million (give or take $25 million). 

That’s quite the range, but at the upper end, it’ll result in another earnings beat. Analysts are expecting just 39 cents and $322.22 million respectively. 

SGH has now climbed more than 26% in the past month alone, and it’s becoming impossible to ignore the stock’s price trend. But is it time to buy this stock? Not quite. We’ve taken a deeper look through the VectorVest stock analysis software and found 3 things you need to see.

SGH May Have Excellent Timing, But Poor Safety and Very Poor Upside Potential are Holding the Stock Back

VectorVest tells you what to buy, when to buy it, and when to sell it - helping you win more trades with less work and stress. It’s all based on 3 simple ratings that give you all the insights you need at a glance. These are relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on its own scale of 0.00-2.00 with 1.00 being the average, allowing for effortless interpretation. It gets even easier, though. You’re given a clear buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. Here’s what we found for SGH:

  • Very Poor Upside Potential: The RV rating is far superior to the typical comparison of price to value alone. It compares a stock’s long-term price appreciation potential (based on a 3-year projection), AAA corporate bond rates, and risk. SGH has a very poor RV rating of 0.30.
  • Poor Safety: The RS rating is a risk indicator. It’s derived from a deep analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. SGH has a poor RS rating of 0.74.
  • Excellent Timing: The RT rating assesses a stock’s price trend. It’s based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.83 is excellent for SGH, reflecting its performance so far this year.

The overall VST rating of 1.22 is good, but not enough to earn the stock a buy. It’s still a HOLD in the VectorVest system - but, we invite you to take advantage of this free stock analysis for deeper insights so you can capitalize on this opportunity when the time is right. Start winning more trades with less work and stress today!

SMART Global Holdings is Up 18% on Q3 Earnings Beat: It’s Not Quite Time to Buy SGH Yet, Though

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. SGH is up another 18%, adding to the impressive gains it made on the stock market so far this year. This comes after earnings and sales beat in the third quarter. The stock itself may have excellent timing, but poor safety and very poor upside potential are holding it back right now.

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!

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