Deutsche Bank provided their outlook on SMART Global Holdings, Inc. (NASDAQ:SGH) ahead of the upcoming Q1 results, expecting the company to report Q1 results in line with Street estimates.
However, for Q2, a seasonally slower quarter for the company, the analysts see the company guiding more conservatively given macroeconomic pressures. That said, they expect overall revenue to start recovering by mid-2023, with the key factor to monitor being the sustainability of the IPS business.
While the analysts acknowledge that macro uncertainties have increased, they noted that the company’s earnings potential is more resilient than in the past as secular growth in IPS (40% of total revenues) should offset the volatility in Memory and LED.