SMART Global Holdings (SGH) SilverLake Divestiture Creates A Buying Opportunity - Needham & Company

Needham & Company analyst Rajvindra Gill reiterated a Buy rating and $75.00 price target on SMART Global Holdings (NASDAQ: SGH) after Silver Lake completed the divestment of SGH resulting in weakness that is a buying opportunity. A recently filed Form 4 indicates that Silver Lake completely divested of Smart Global shares as of July 26th, 2021. Historically, Silver Lake held over 40% of the company's shares and was as high as 60%+ in 2017,

Despite the recent weakness, the analyst believes that liquidity in the shares will improve and will attract a wider investor base. The analyst stated "The company has recently undergone segment reorganization and completed the Cree LED acquisition, positioning it for delivering on gross margin expansion in its LED and IPS segments. The company has significant earnings power potential: we estimate non-GAAP EPS of $5.90 for FY22 with the potential for ~$9.00 in 2026 (the latter being based on a 25% non-GAAP gross margin and 12.5% resulting non-GAAP operating margin and a 7.5% revenue CAGR for FY'21-26). As a result of the recent selling by Silver Lake, the stock's FY2 Non-GAAP P/E multiple has compressed to nearly 40% to ~7.4x lately, making the shares more compelling as they trade cheap relative to their own history and our comp group for the name."

For an analyst ratings summary and ratings history on SMART Global Holdings click here. For more ratings news on SMART Global Holdings click here.

Shares of SMART Global Holdings closed at $44.93 yesterday.

You May Also Be Interested In

• LeonaBio (LONA) Price Target Cut to $17 by Citizens Amid Pipeline Development
• Walmart (WMT) PT Lowered to $135 at Guggenheim
• Dillard's Inc. (DDS) PT Raised to $468 at UBS