Asset Breakdown
394.4 M
Assets Non Current
207.3 M
Goodwill
752.3 M
Current Assets
| Total Assets | 1.15 Billion | |
| Current Assets | 752.34 Million | |
| Assets Non Current | 394.35 Million | |
| Goodwill | 207.26 Million | |
| Tax Assets | 41.4 Million |
Is Smart Global (USA Stocks:SGH) having difficulty to pay out its debt?
 | By Raphi Shpitalnik | Macroaxis Story |
Smart Global Holdings carries a debt of 856.85 million, with a debt to equity (D/E) ratio of 1.78. This is acceptable considering its current industry classification. The company's current ratio stands at 2.19, indicating that it is liquid and capable of meeting its financial obligations when they are due. While debt can support Smart Global's operations until it encounters difficulties in repayment, either through new capital or free cash flow, there is a risk that shareholders could end up with nothing if the company fails to meet its legal debt obligations. However, a more common scenario is for companies like Smart Global Holdings to issue additional shares at discounted prices, which dilutes the value for existing shareholders. In this context, debt can be a superior tool for Smart Global to invest in high-return growth. When evaluating Smart Global's use of debt, it should always be considered in conjunction with cash and equity.
Main Points
Smart Global Holdings (SGH) is a promising investment opportunity despite its current debt obligations. The company's total stockholder equity stands at a robust $222.5M, indicating a strong financial position. This is further supported by the company's free cash flow of $24.3M, which provides SGH with the necessary liquidity to meet its short-term obligations and invest in growth opportunities. Furthermore, the company's other cashflows from financing activities amount to a significant $531.5M, which can be leveraged to service its debt and finance its operations. Therefore, maintaining your position in SGH could yield substantial returns in the long run.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
Every cloud has a silver lining, and this rings true for investors considering Smart Global Holdings (NASDAQ: SGH). Despite its current debt obligations totaling $850.5M, this technology company, specifically operating in the Semiconductors & Semiconductor Equipment sector, presents a promising investment opportunity. Smart Global Holdings has a robust financial footing with a total stockholder equity of $222.5M and a net invested capital of $1B. This, coupled with a healthy cash and short-term investments balance of $390.8M, demonstrates the company's ability to manage its debt obligations effectively. While the company has experienced a loss before tax of $39.5M, it's important to note that it has generated a net income from continuing operations of $9.7M. This indicates that despite the loss, the company is still generating positive cash flow from its core business operations. The company's financial stability is further underscored by the consensus of six analysts who recommend a 'Buy' rating for the stock. This is a strong indicator of the company's potential for growth and its ability to deliver solid returns to its investors in the long run. In conclusion, despite the current debt obligations, Smart Global Holdings offers a promising investment opportunity. Investors are advised to maintain their positions in the company and leverage its potential for growth in the technology sector. Smart Global Holdings is set to announce its earnings tomorrow, with the forthcoming quarterly report anticipated on January 9, 2024. While many baby boomers remain indifferent towards the semiconductors and semiconductor equipment sector, it is worthwhile to consider Smart Global Holdings as a distinctive investment option for millennials.
How important is SGH Old's Liquidity
SGH Old financial leverage refers to using borrowed capital as a funding source to finance SGH Old ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. SGH Old financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to SGH Old's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of SGH Old's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between SGH Old's total debt and its cash.
What is driving SGH Old Investor Appetite?
The entity reported the last year's revenue of 1.44 B. Total Income to common stockholders was 9.69 M with profit before taxes, overhead, and interest of 424.58 M.
As Benjamin Franklin once said, an investment in knowledge pays the best interest. Smart Global Holdings (SGH), a key player in the semiconductors industry, is a promising investment opportunity despite its current debt obligations. The company's current ratio stands at 2.23X, indicating that it has more than enough resources to cover its short-term liabilities. Moreover, its debt-to-equity ratio is a meager 1.78%, suggesting that the company is not overly reliant on debt to finance its operations.SGH's net asset value of 1.51B further underscores its strong financial footing. However, investors should also be mindful of the company's net income applicable to common shares, which registered a loss of 187.5M. Despite this, the company's return on assets of 3.82% indicates that it is efficiently utilizing its assets to generate profits. The strong institutional ownership, at 96.97%, signals confidence in the company's long-term prospects. In conclusion, Smart Global Holdings presents a solid investment opportunity that is worth maintaining despite the firm's current debt obligations. .
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of SGH Old. Please refer to our Terms of Use for any information regarding our disclosure principles.