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Benchmark Electronics (BHE)
NYSE:BHE
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Benchmark Electronics
(NYSE:BHE)
62Neutral
Positive Factors
Earnings
BHE posted stronger than expected Q4 earnings with in-line revenues.
Market Demand
Solid demand trends across most of its market verticals support BHE's positive outlook.
Negative Factors
Inventory
Medical is likely to continue to be a headwind as customers continue destocking inventories.
Benchmark Electronics (BHE) vs. S&P 500 (SPY)
Market Cap
$1.37B
Dividend Yield1.78%
Average Volume (3M)538.38K
Price to Earnings (P/E)22.1
Beta (1Y)1.14
Revenue Growth-6.44%
EPS Growth-2.60%
CountryUS
Employees11,700
SectorTechnology
Sector Strength42
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.73
Shares Outstanding36,016,624
10 Day Avg. Volume760,608
30 Day Avg. Volume538,378
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.54
Price to Cash Flow (P/CF)7.90
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$51.00Price Target Upside32.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Benchmark Electronics Business Overview & Revenue Model
Company DescriptionBenchmark Electronics, Inc., together with its subsidiaries, provides product design, engineering services, technology solutions, and manufacturing services in the Americas, Asia, and Europe. The company offers engineering services and technology solutions, including new product design, prototype, testing, and related engineering services; and custom testing and technology solutions, as well as automation equipment design and build services. It also provides electronics manufacturing and testing services, such as printed circuit board assembly and test solutions, assembly of subsystems, circuitry and functionality testing of printed assemblies, environmental and stress testing, and component reliability testing; component engineering services; manufacturing defect analysis, in-circuit testing, functional testing, and life cycle testing services, as well as environmental stress tests of assemblies of boards or systems; and failure analysis. In addition, the company offers precision machining and electromechanical assembly services; and subsystem and system integration services, including assembly, configuration, and testing for various industries. Further, it provides value-added support systems; supply chain management solutions; direct order fulfillment; and aftermarket non-warranty services, including repair, replacement, refurbishment, remanufacturing, exchange, systems upgrade, and spare parts manufacturing throughout a product's life cycle. The company serves original equipment manufacturers in the aerospace and defense, medical technologies, complex industrials, semiconductor capital equipment, telecommunications, and advanced computing industries. It markets its services and solutions primarily through a direct sales force. The company was formerly known as Electronics, Inc. Benchmark Electronics, Inc. was founded in 1979 and is headquartered in Tempe, Arizona.
How the Company Makes MoneyBenchmark Electronics generates revenue primarily through its contract manufacturing services and integrated engineering solutions, serving a wide range of industries such as aerospace, medical devices, telecommunications, and industrial equipment. The company earns money by offering design and engineering services, supplying precision technology products, and providing complete supply chain management. Key revenue streams include long-term contracts with OEMs for designing and manufacturing complex electronic products, as well as partnerships with industry leaders to leverage technological advancements and enhance service offerings. Benchmark Electronics' ability to maintain strong relationships with its clients and adapt to technological changes significantly contributes to its earnings.
Benchmark Electronics Financial Statement Overview
Summary
Benchmark Electronics presents a solid financial profile with strong balance sheet performance and consistent profitability. Positive cash flow trends bolster its financial standing, though revenue contraction poses a challenge.Income Statement
Benchmark Electronics shows moderate performance with stable revenue trends. While the latest annual revenue decreased compared to the previous year, gross profit margin improved slightly, indicating efficiency in cost management. Net profit margin remains stable, reflecting consistent profitability levels. EBIT and EBITDA margins are healthy, demonstrating strong operational management.75
Positive
Balance Sheet
The company's balance sheet is robust with a strong equity base, demonstrated by a favorable equity ratio. The debt-to-equity ratio has significantly improved due to reduced total debt, enhancing financial stability. Return on equity is decent, suggesting effective utilization of equity to generate profits.80
Positive
Cash Flow
Cash flow analysis indicates positive trends, with significant growth in free cash flow, showcasing improved cash generation capabilities. The operating cash flow to net income ratio suggests efficient conversion of income to cash. However, historical fluctuations in cash flow warrant cautious monitoring.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.66B | 2.84B | 2.89B | 2.26B | 2.05B | Gross Profit |
| 270.02M | 271.07M | 255.24M | 205.90M | 175.05M | EBIT |
| 109.41M | 109.66M | 90.07M | 53.06M | 44.28M | EBITDA |
| 109.41M | 158.50M | 141.07M | 97.39M | 74.45M | Net Income Common Stockholders |
| 63.33M | 64.31M | 68.23M | 35.77M | 14.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 315.15M | 277.39M | 207.43M | 271.75M | 390.81M | Total Assets |
| 2.14B | 2.27B | 2.23B | 1.90B | 1.74B | Total Debt |
| 115.73M | 454.34M | 411.64M | 221.15M | 212.33M | Net Debt |
| -199.42M | 176.95M | 204.21M | -50.60M | -178.48M | Total Liabilities |
| 1.03B | 1.20B | 1.20B | 930.08M | 754.65M | Stockholders Equity |
| 1.11B | 1.08B | 1.03B | 973.80M | 989.59M |
| Cash Flow | Free Cash Flow | |||
| 155.97M | 96.56M | -224.24M | -44.80M | 80.92M | Operating Cash Flow |
| 189.22M | 174.29M | -177.47M | -2.62M | 120.44M | Investing Cash Flow |
| -32.77M | -77.14M | -41.17M | -41.88M | -34.38M | Financing Cash Flow |
| -109.11M | -23.58M | 159.23M | -73.95M | -57.53M |
Benchmark Electronics Technical Analysis
Negative
38.38
Price Trends
40.79
Negative
44.07
Negative
42.86
Negative
Market Momentum
-0.54
Positive
38.68
Neutral
9.86
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BHE, the sentiment is Negative. The current price of 38.38 is below the 20-day moving average (MA) of 39.22, below the 50-day MA of 40.79, and below the 200-day MA of 42.86, indicating a bearish trend. The MACD of -0.54 indicates Positive momentum. The RSI at 38.68 is Neutral, neither overbought nor oversold. The STOCH value of 9.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BHE.
Benchmark Electronics Risk Analysis
Benchmark Electronics disclosed 36 risk factors in its most recent earnings report. Benchmark Electronics reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Benchmark Electronics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.78B | 13.79 | 18.45% | ― | -12.94% | 47.70% | |
74 Outperform | $4.13B | 18.95 | 10.55% | ― | -8.92% | -12.11% | |
73 Outperform | $3.46B | 29.54 | 9.27% | ― | -3.53% | -3.90% | |
63 Neutral | $14.94B | 32.64 | 24.10% | 0.23% | -14.45% | -64.32% | |
62 Neutral | $1.37B | 22.07 | 5.78% | 1.78% | -6.44% | -2.60% | |
57 Neutral | $20.94B | 10.43 | -13.41% | 2.52% | 4.53% | -23.34% |
* Technology Sector Average
Performance Comparison
BHE
Benchmark Electronics
38.38
9.01
30.68%
CLS
Celestica
82.35
34.28
71.31%
FLEX
Flex
34.06
5.47
19.13%
JBL
Jabil
138.75
3.22
2.38%
PLXS
Plexus
116.03
20.44
21.38%
SANM
Sanmina-Sci
77.51
18.17
30.62%
Benchmark Electronics Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -11.67% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company navigating mixed market conditions with strong operational execution. While there are notable achievements in margin expansion and sector-specific growth, significant challenges remain in certain areas such as Medical and AC&C. The company's focus on operational excellence and strategic investments, particularly in Semi-Cap, provides a positive outlook despite the current revenue decline.Highlights
Strong Margin Expansion and Cash Flow
Non-GAAP gross margin increased by 60 basis points and operating margin by 20 basis points year-over-year. The company generated over $156 million in free cash flow in the year, with a significant reduction in inventory by over 130 million or 20%.
Semi-Cap and A&D Growth
Semi-Cap revenue increased 18% year-over-year in Q4 and 12% for the full year, supported by new wins and share gains. A&D revenue was up 15% in Q4 and 20% for the full year, driven by strong demand in Commercial Aerospace and Defense sectors.
Operational and Financial Stability
Despite mid-single-digit revenue declines, the company maintained strong operational execution with non-GAAP EPS exceeding guidance. Cash conversion cycle improved, and debt was further reduced by $22 million in the quarter.
Expansion Plans in Penang
Benchmark plans to break ground on a fourth building in Penang, Malaysia, to support Semi-Cap growth, indicating confidence in future demand and new program wins.
Lowlights
Revenue Declines in Medical and AC&C
Medical revenue was down 7% year-over-year in Q4 and 19% for the full year, impacted by inventory rebalancing and demand weakness. AC&C revenue decreased 48% in Q4 and 30% for the full year, driven by HPC program completions and ongoing weakness in communications.
Overall Revenue Decline
Total revenue for the fiscal year 2024 was $2.7 billion, down 6% from the prior year, reflecting challenges in several market sectors.
Mixed Market Recovery
Despite growth in some sectors, the broader market recovery remains uneven, with ongoing challenges in Complex Industrials and AC&C expected to persist into the first half of 2025.
Company Guidance
During the Benchmark Fourth Quarter and Fiscal Year 2024 Earnings Call, the company provided guidance for the first quarter of fiscal year 2025. They expect revenue to range between $620 million and $660 million. Non-GAAP gross margin is anticipated to be between 10% and 10.2%, consistent with recent quarters. Non-GAAP SG&A expenses are forecasted to fall within $34 million to $36 million, and the non-GAAP operating margin is projected to be between 4.5% and 4.7%. Non-GAAP diluted earnings per share are expected to range from $0.48 to $0.54, with a Q1 effective tax rate estimated to be between 23% and 24%. The company plans to invest $15 million to $20 million in CapEx during Q1, primarily supporting a new building in Penang, Malaysia, and expects free cash flow in Q1, contributing to a full-year forecast of $50 million to $80 million, inclusive of elevated CapEx spend associated with this investment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.