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Flex Ltd (FLEX)
NASDAQ:FLEX
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Flex
(NASDAQ:FLEX)
Rating:80Outperform
Price Target:
$48.00
▲( 15.72% Upside)
Positive Factors
Financial Performance
Annual operating margin guided above 6%, one year ahead of schedule.
Growth Opportunities
FLEX is expected to benefit from expansion into growth vectors, including power and cooling.
Revenue Growth
Flex's data center business increased 45% year-over-year.
Negative Factors
Automotive Sector
Management expects automotive to continue to be soft through the near-term.
Market Expectations
F26 end-market expectations amid macro uncertainty.
Revenue Impact
Customer-sourced inventory reduces the total revenue for FLEX, but is a tailwind to margins.
Flex (FLEX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.49B
Dividend YieldN/A
Average Volume (3M)3.99M
Price to Earnings (P/E)19.6
Beta (1Y)1.57
Revenue Growth-8.07%
EPS Growth-8.00%
CountryUS
Employees148,115
SectorTechnology
Sector Strength76
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.73
Shares Outstanding373,315,600
10 Day Avg. Volume3,958,896
30 Day Avg. Volume3,987,466
Financial Highlights & Ratios
PEG Ratio-1.31
Price to Book (P/B)3.23
Price to Sales (P/S)0.00
P/FCF Ratio14.51
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue0.14
Enterprise Value/Gross Profit6.88
Enterprise Value/Ebitda2.95
Forecast
1Y Price Target
$45.43Price Target Upside9.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Flex Business Overview & Revenue Model
Company DescriptionFlex (FLEX) is a global leader in the design, engineering, and manufacturing of innovative products for a wide array of industries. The company operates in several sectors including automotive, healthcare, industrial, communications, and consumer electronics. Flex offers a comprehensive range of services including design and engineering, manufacturing, supply chain management, and logistics solutions, helping businesses bring their products to market efficiently and effectively.
How the Company Makes MoneyFlex 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 demonstrates stable financial health with a focus on maintaining margins and managing debt. Income statement shows revenue challenges, but the balance sheet is solid with strategic leverage. Cash flow is stable, although attention to free cash flow trends is needed.Income Statement
Flex has shown a mixed performance over the recent years. The gross profit margin and EBIT margin have remained relatively stable, indicating efficient cost management. However, the net profit margin has seen some fluctuations, reflecting challenges in maintaining consistent bottom-line growth. Revenue growth has been inconsistent, with a noticeable decline in recent years, which could signal market challenges or strategic shifts.75
Positive
Balance Sheet
The company maintains a solid equity base with a stable debt-to-equity ratio, suggesting a balanced approach to leveraging. However, the equity ratio indicates a moderate reliance on liabilities, which could pose risks if market conditions worsen. Return on Equity (ROE) has been satisfactory, reflecting the company's ability to generate profit from its equity base.70
Positive
Cash Flow
Cash flow from operations has been robust, indicating strong internal cash generation capability. The free cash flow has seen growth, albeit with some volatility, which could impact future investment and financing decisions. The ratios of operating and free cash flow to net income suggest efficient cash management, though potential fluctuations in free cash flow growth remain a concern.68
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 25.81B | 26.41B | 30.35B | 26.04B | 24.12B | Gross Profit |
| 2.16B | 1.86B | 2.27B | 1.93B | 1.69B | EBIT |
| 1.17B | 1.03B | 1.18B | 972.00M | 821.00M | EBITDA |
| 1.78B | 1.55B | 1.49B | 1.46B | 1.43B | Net Income Common Stockholders |
| 838.00M | 1.01B | 793.00M | 936.00M | 613.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.29B | 2.47B | 3.29B | 2.96B | 2.64B | Total Assets |
| 18.38B | 18.26B | 21.39B | 19.32B | 15.84B | Total Debt |
| 1.67B | 3.75B | 4.35B | 4.75B | 4.34B | Net Debt |
| -624.00M | 1.28B | 1.05B | 1.78B | 1.71B | Total Liabilities |
| 13.38B | 12.93B | 15.69B | 15.12B | 12.40B | Stockholders Equity |
| 5.00B | 5.33B | 5.35B | 4.13B | 3.44B |
| Cash Flow | Free Cash Flow | |||
| 1.07B | 796.00M | 315.00M | 581.00M | -207.00M | Operating Cash Flow |
| 1.50B | 1.33B | 950.00M | 1.02B | 144.00M | Investing Cash Flow |
| -838.00M | -492.00M | -604.00M | -951.00M | -202.00M | Financing Cash Flow |
| -821.00M | -1.66B | 2.00M | 280.00M | 743.00M |
Flex Technical Analysis
Positive
41.48
Price Trends
35.28
Positive
37.68
Positive
36.22
Positive
Market Momentum
2.10
Negative
67.60
Neutral
61.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLEX, the sentiment is Positive. The current price of 41.48 is above the 20-day moving average (MA) of 39.08, above the 50-day MA of 35.28, and above the 200-day MA of 36.22, indicating a bullish trend. The MACD of 2.10 indicates Negative momentum. The RSI at 67.60 is Neutral, neither overbought nor oversold. The STOCH value of 61.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FLEX.
Flex Risk Analysis
Flex disclosed 43 risk factors in its most recent earnings report. Flex reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Flex Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.49B | 19.65 | 16.23% | ― | -8.07% | -8.00% | |
79 Outperform | $4.50B | 19.48 | 11.03% | ― | -1.50% | 1.84% | |
76 Outperform | $3.51B | 25.19 | 10.93% | ― | -0.69% | 42.26% | |
74 Outperform | $4.61B | 39.09 | 9.66% | 0.18% | 8.40% | 20.03% | |
68 Neutral | $1.29B | 24.76 | 4.84% | 1.88% | -7.36% | -20.46% | |
64 Neutral | $17.75B | 39.63 | 24.10% | 0.19% | -14.45% | -64.32% | |
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% |
* Technology Sector Average
Performance Comparison
FLEX
Flex
41.48
7.84
23.31%
BHE
Benchmark Electronics
35.83
-6.92
-16.19%
ESE
Esco Technologies
178.40
70.51
65.35%
JBL
Jabil
165.38
46.89
39.57%
PLXS
Plexus
129.57
16.91
15.01%
SANM
Sanmina-Sci
84.20
16.59
24.54%
Flex Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q4-2025)
| % Change Since: 12.81%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Flex, driven by significant growth in the data center segment, record annual results, and strategic acquisitions. However, challenges such as automotive sector weakness and potential tariff impacts introduce some uncertainty. The company's guidance and strategic positioning suggest confidence in continued margin improvement and growth.Q4-2025 Updates
Positive Updates
Strong Revenue and Margin Growth
Fiscal Q4 revenue was $6.4 billion, growing almost 4% year-over-year. Adjusted operating margin came in at 6.2%, another quarterly record, with adjusted EPS of $0.73, up 28% over last year.
Record Annual Performance
Flex achieved record annual adjusted operating margins of 5.7% and double-digit adjusted EPS growth for the fifth consecutive year, reaching $2.65 per share. Free cash flow exceeded $1 billion for the second consecutive year.
Data Center Segment Surge
Total data center revenue grew about 50% year-over-year, reaching approximately $4.8 billion in fiscal '25 at accretive margins.
Strategic Acquisitions and Awards
Flex completed several key acquisitions and won two PACE awards in the automotive space with its NVIDIA Drive AGX powered Jupyter compute platform and backup DC/DC converter.
Positive Outlook and Guidance
Flex expects to achieve 6% adjusted operating margin in fiscal 2026, reaching the fiscal 2027 target a year ahead of schedule, with continued strong free cash flow conversion.
Negative Updates
Automotive Sector Weakness
The company expects revenue in the automotive sector to be flat at the midpoint due to macro-related softness, with further weakness anticipated in fiscal Q1 2026.
Potential Impact of Tariffs
The rapidly evolving tariff situation poses risks, particularly in automotive, with potential demand impacts and higher costs for raw materials procured from China.
Challenges in Core Industrial and Renewables
Revenue in the industrial and renewables sectors showed softness, with expectations for these headwinds to be temporary.
Company Guidance
In the recent earnings call for Flex's fiscal Q4 and FY 2025, the company reported a robust performance with revenue reaching $6.4 billion, a 4% year-over-year increase, and an adjusted operating margin of 6.2%, marking a new quarterly record. The full year results showed an adjusted operating margin of 5.7% and an adjusted EPS of $2.65, reflecting a 28% rise compared to the previous year. Flex also achieved over $1 billion in free cash flow, surpassing their 80%-plus free cash flow conversion target for the second consecutive year. The data center business was a major growth driver, with revenue climbing approximately 50% year-over-year to $4.8 billion, fueled by strong demand in both cloud operations and power solutions. For fiscal 2026, Flex anticipates revenue between $25 billion and $26.8 billion, with an operating margin of 6% to 6.1%. The company is on track to achieve its FY 2027 margin target a year ahead of schedule, despite potential tariff impacts and macroeconomic uncertainties.Flex Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Flex Appoints Kevin S. Krumm as New CFO
Positive
Nov 22, 2024
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.
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.