Flex (FLEX) AI Stock Analysis

• Market Cap: $10.75B
• Dividend Yield: N/A
• Average Volume (3M): 4.28M
• Price to Earnings (P/E): 11.3
• Beta (1Y): 1.55
• Revenue Growth: -12.94%
• EPS Growth: 47.70%
• Country: US
• Employees: 148,115
• Sector: Technology
• Sector Strength: 40
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 2.47
• Shares Outstanding: 383,103,060
• 10 Day Avg. Volume: 4,490,504
• 30 Day Avg. Volume: 4,281,869
• PEG Ratio: 0.24
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.58
• Price to Cash Flow (P/CF): 8.40
• P/FCF Ratio: 7.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $48.50
• Price Target Upside: 74.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Flex demonstrates robust financial health and growth potential, especially highlighted by record margins and strategic expansions in the data center sector. While valuation remains attractive, technical indicators point to bearish trends, which could indicate near-term volatility. Earnings call insights add confidence, despite some market and geopolitical concerns.

Flex Business Overview & Revenue Model

Company Description

Flex Ltd. provides design, engineering, manufacturing, and supply chain services and solutions to original equipment manufacturers in Asia, the Americas, and Europe. It operates through three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The company provides cross-industry technologies, including human-machine interface, internet of things platforms, power, sensor fusion, and smart audio. It also offers integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects. In addition, the company provides value-added design and engineering services; and systems assembly and manufacturing services that include enclosures, testing services, and materials procurement and inventory management services. Further, it offers chargers for smartphones and tablets; adapters for notebooks and gaming systems; power supplies for the server, storage, and networking markets; and power solutions, such as switchgear, busway, power distribution, modular power systems, and monitoring solutions and services. Additionally, the company provides after-market and forward supply chain logistics services to computing, consumer digital, infrastructure, industrial, mobile, automotive, and medical industries; and reverse logistics and repair solutions, including returns management, exchange programs, complex repair, asset recovery, recycling, and e-waste management. It serves to cloud, communications, enterprise, automotive, industrial, consumer devices, lifestyle, healthcare, and energy industries. The company was formerly known as Flextronics International Ltd. and changed its name to Flex Ltd. in September 2016. Flex Ltd. was incorporated in 1990 and is based in Singapore.

How the Company Makes Money

Flex makes money primarily through its manufacturing and supply chain solutions, which are offered to businesses across diverse industries. The company generates revenue by providing end-to-end services that include product design, engineering, component sourcing, assembly, and logistics. Flex's key revenue streams include contract manufacturing services, where it produces products for clients under their brand names, and supply chain management services, which optimize the logistics and distribution processes for its clients. Significant partnerships with major companies in the automotive, healthcare, and technology sectors further bolster its earnings by providing steady contracts and collaborative opportunities for innovation.

Flex Financial Statement Overview

Summary

Flex exhibits strong growth and profitability in the income statement with robust revenue figures and profit margins. The balance sheet shows solid financial leverage management, though the decrease in total assets and equity poses potential risks. Cash flow management is excellent, with significant free cash flow improvement and efficient cash generation.

Income Statement

Flex has shown strong revenue growth over the years, with a recent TTM revenue of $23.94 billion, indicating a stable demand in the hardware and equipment industry. The gross profit margin is healthy at approximately 8.29%, and the net profit margin stands at 4.07%, highlighting operational efficiency. However, there was a slight decline in revenue from the previous year. EBITDA and EBIT margins are robust, supporting good operational performance.

Balance Sheet

The company's balance sheet is solid with a debt-to-equity ratio of 0.20, showcasing strong financial leverage management. The equity ratio of 27.32% suggests a balanced approach to funding operations through equity. ROE is impressive at 19.52%, indicating effective use of equity. However, the decrease in total assets and equity over the years may pose future risks.

Cash Flow

Flex demonstrates strong cash flow management with a free cash flow of $1.35 billion, reflecting a significant improvement. The operating cash flow to net income ratio of 1.80 indicates efficient cash generation relative to profit. The free cash flow growth rate is substantial, pointing to an effective capital expenditure strategy. The company maintains a healthy liquidity position.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
23.94B	26.41B	30.35B	26.04B	24.12B	24.21B
	Gross Profit
1.98B	1.95B	2.27B	1.93B	1.69B	1.34B
	EBIT
1.06B	1.03B	1.18B	972.00M	821.00M	348.19M
	EBITDA
1.13B	1.32B	1.49B	1.46B	1.43B	790.98M
	Net Income Common Stockholders
974.70M	1.01B	793.00M	936.00M	613.00M	88.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.93B	2.47B	3.29B	2.96B	2.64B	1.92B
	Total Assets
10.64B	18.26B	21.39B	19.32B	15.84B	13.69B
	Total Debt
2.26B	3.75B	4.35B	4.75B	4.34B	3.37B
	Net Debt
329.25M	1.28B	1.05B	1.78B	1.71B	1.44B
	Total Liabilities
8.66B	12.93B	15.69B	15.12B	12.40B	10.86B
	Stockholders Equity
1.98B	5.33B	5.35B	4.13B	3.44B	2.83B
Cash Flow		Free Cash Flow
1.35B	796.00M	315.00M	581.00M	-207.00M	-2.00B
	Operating Cash Flow
1.76B	1.33B	950.00M	1.02B	144.00M	-1.53B
	Investing Cash Flow
-722.00M	-492.00M	-604.00M	-951.00M	-202.00M	2.28B
	Financing Cash Flow
-1.42B	-1.66B	2.00M	280.00M	743.00M	-508.00M

Flex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLEX, the sentiment is Negative. The current price of 27.8 is below the 20-day moving average (MA) of 33.39, below the 50-day MA of 37.14, and below the 200-day MA of 35.24, indicating a bearish trend. The MACD of -1.18 indicates Positive momentum. The RSI at 37.14 is Neutral, neither overbought nor oversold. The STOCH value of 15.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLEX.

Flex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESE	80 Outperform	$3.67B	33.39	9.22%	0.22%	8.94%	18.56%
FLEX	78 Outperform	$10.75B	11.25	18.45%	―	-12.94%	47.70%
SANM	74 Outperform	$3.84B	17.24	10.55%	―	-8.92%	-12.11%
PLXS	73 Outperform	$3.37B	28.86	9.27%	―	-3.53%	-3.90%
JBL	63 Neutral	$13.28B	29.02	24.10%	0.26%	-14.45%	-64.32%
BHE	62 Neutral	$1.31B	21.13	5.78%	2.05%	-6.44%	-2.60%
Sector *	57 Neutral	$18.45B	9.41	-13.97%	2.74%	5.04%	-23.56%

Flex Corporate Events

Flex Appoints Kevin S. Krumm as New CFO

Flex Ltd. has appointed Kevin S. Krumm as Chief Financial Officer, effective January 6, 2025, as part of its strategic push to enhance shareholder value and achieve long-term financial success. Krumm, with over 20 years of experience in various industries, will replace interim CFO Jaime Martinez. He aims to leverage his expertise in driving the company’s financial strategy, ensuring Flex remains at the forefront of innovation and operational excellence.