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Plexus (PLXS)
NASDAQ:PLXS
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Plexus
(NASDAQ:PLXS)
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Rating:74Outperform
Price Target:
$221.00
▲(13.84% Upside)
Action:ReiteratedDate:02/20/26
PLXS scores well on improving operating performance and a strong, low-leverage balance sheet, supported by positive price momentum and an upbeat earnings outlook with raised/strong guidance signals and sizable program wins. The main offsets are premium valuation (P/E ~30.7) and cash-flow variability, including recent free-cash-flow decline and near-term working-capital/capex pressure.
Positive Factors
Balance Sheet Strength
Very low leverage and a steadily growing equity base reduce financial risk and preserve flexibility. This supports higher capex for automation, share repurchases, and potential M&A while limiting refinancing pressure across economic cycles, strengthening long-term resilience.
Program Wins
Material program awards, especially $220M in Aerospace & Defense, indicate durable booked revenue streams once ramped. High-value, multi-year contracts reduce churn, improve visibility, and underpin production scale and margin leverage as programs transition from prototype to volume.
Large Opportunity Funnel & Operational ROI
A $3.6B qualified funnel plus automation initiatives (robotics/AI with sub-12 month ROIs and site margin tailwinds) provide sustained growth runway and the potential for scalable margin expansion as wins convert and asset utilization improves over multiple quarters.
Negative Factors
Thin Gross Margins
A ~10% gross margin leaves limited room to absorb cost inflation, commodity swings, or mix shifts. Small adverse moves in input costs or customer mix can disproportionately impact operating profits, making margin path dependent on sustained operational discipline and pricing power.
Volatile Cash Conversion
A sizable TTM FCF decline and historically uneven cash conversion constrain internal funding and increase reliance on revolver capacity. That variability raises the risk that growth investments, buybacks, or higher capex cycles will pressure liquidity in weaker quarters.
Sector/Timing Risk
Concentration in cyclical end markets—an 8% industrial sequential decline and uncertain commercial aerospace pull-through—creates timing risk for revenue and margin recovery. Program ramps may lag OEM production rates, delaying expected cash and margin benefits.
Plexus (PLXS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.20B
Dividend YieldN/A
Average Volume (3M)357.85K
Price to Earnings (P/E)30.2
Beta (1Y)1.10
Revenue Growth1.82%
EPS Growth56.52%
CountryUS
Employees20,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.78
Shares Outstanding26,786,467
10 Day Avg. Volume256,482
30 Day Avg. Volume357,848
Financial Highlights & Ratios
PEG Ratio0.40
Price to Book (P/B)2.66
Price to Sales (P/S)0.96
P/FCF Ratio25.16
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.25
Enterprise Value/Gross Profit12.55
Enterprise Value/Ebitda19.52
Forecast
1Y Price Target
$208.67Price Target Upside7.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)7.68
Revenue Forecast (FY)$4.52B
Plexus Business Overview & Revenue Model
Company DescriptionPlexus Corp., together with its subsidiaries, provides electronic manufacturing services in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It offers design and development, supply chain, new product introduction, and manufacturing solutions, as well as aftermarket services to companies in the healthcare/life sciences, industrial/commercial, aerospace/defense, and communications market sectors. Plexus Corp. was founded in 1979 and is headquartered in Neenah, Wisconsin.
How the Company Makes MoneyPlexus generates revenue primarily through its electronic manufacturing services, which include product design, prototyping, manufacturing, and supply chain management. The company earns money by charging clients for these services, often on a contract basis. Key revenue streams include contracts with customers in the healthcare, industrial, and aerospace sectors, which often involve long-term agreements for ongoing manufacturing needs. Additionally, Plexus benefits from partnerships with leading technology companies, which provide a steady flow of business and enhance its market presence. The company also capitalizes on value-added services such as logistics and inventory management, further contributing to its revenue. Economic factors, demand in high-growth industries, and advancements in technology play significant roles in Plexus's earnings potential.
Plexus Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents strong positive momentum: above-guidance revenue growth (10% YoY), high-value program wins (notably $220M in Aerospace & Defense), a robust $3.6B opportunity funnel, and reaffirmed free cash flow and margin targets. Near-term challenges include working capital-driven cash usage, inventory increases and seasonal compensation headwinds (50–60 bps), an $8% sequential decline in Industrial revenue, and some supply-chain lead time pressure. Management believes these investments and automation initiatives will drive scalable margin improvement and support the potential to meet or exceed the high end of the 9%–12% fiscal 2026 revenue target. Overall, the positive operational and demand signals materially outweigh the manageable short-term headwinds.Q1-2026 Updates
Positive Updates
Revenue Growth and Sequential Momentum
Revenue of $1.07 billion in Q1 met the midpoint of guidance and marked the fourth consecutive quarter of sequential growth, representing a 10% year-over-year increase.
Strong Earnings Performance
Non-GAAP diluted EPS of $1.78 met the high end of guidance and non-GAAP operating margin was 5.8%, consistent with guidance despite near-term investments.
Material New Program Wins
Secured 22 new manufacturing programs worth $283 million in annualized revenue when fully ramped; Aerospace & Defense wins were $220 million (record quarterly performance).
Robust Opportunity Funnel
Funnel of qualified manufacturing opportunities remains strong at $3.6 billion; Aerospace & Defense engineering solutions funnel achieved an all-time high.
Upgraded Near-Term Guidance and FY Upside
Q2 revenue guidance of $1.11B–$1.15B (midpoint = +6% sequential, +15% YoY). Company sees potential to meet or exceed the high end of its 9%–12% fiscal 2026 revenue growth target.
Sector Highlights: Healthcare and Aerospace
Healthcare/Life Sciences revenue increased 10% sequentially in Q1 with $40M in wins; company expects Healthcare and Aerospace & Defense sectors each to exceed the 9%–12% fiscal 2026 growth target.
Strong Capital Efficiency and Return
Delivered a return on invested capital of 13.2%, 420 basis points above weighted average cost of capital; ended Q1 in a net cash position with $440M available on the revolver.
Reaffirmed Free Cash Flow and Strategic CapEx
Reconfirmed fiscal 2026 free cash flow target of approximately $100M while guiding capital spending to $100M–$120M to support growth and automation investments.
Operational and Automation Initiatives
Progressing automation (AutoStore, robotics) and AI initiatives across sites with ROIs under 12 months for certain robot deployments; redeployed 7 SMT lines to improve asset utilization and reduce footprint needs.
Site-Level Margin Tailwinds
New Thailand facility expected to contribute ~25–30 basis points of margin improvement for the year; Malaysia site issues were small and expected to be near breakeven by Q2.
Negative Updates
Industrial Sector Weakness
Industrial revenue declined 8% sequentially in Q1; although semicap and industrial equipment are showing ramps, other subsectors remain soft and consolidation of Industrial growth is needed.
Working Capital and Cash Consumption
Cash from operations consumed approximately $16M in Q1 and combined with $35M of capex resulted in a cash outflow of roughly $51M for the quarter as working capital investments support anticipated revenue ramps.
Increased Cash Cycle and Inventory Days
Cash cycle rose to 69 days (6 days higher than prior quarter) due primarily to a 6-day increase in inventory days tied to investments supporting anticipated revenue growth.
Higher CapEx and Near-Term Cash Use
Fiscal 2026 capital spending guidance raised to $100M–$120M (higher than prior estimate), and management expects breakeven to slight cash usage in Q2 while first-half cash supports growth.
Seasonal and Compensation Headwinds
Q2 faces roughly a 50–60 basis point headwind to operating margin from seasonal compensation and variable incentive expenses; SG&A expected to increase to $54M–$55M.
Supply-Chain Lead Time Pressure
Management reported rising lead times in semiconductor and printed circuit board commodities (APAC), prompting prepositioning of inventory and extended PO coverage with suppliers, which pressures working capital.
Higher Near-Term Non-Operating Expense
Non-operating expense expected to increase to approximately $5.3M in Q2 (sequentially higher, driven by greater interest expense) after a favorable Q1 of $3.4M.
Aerospace Pull-Through Uncertainty
While Aerospace & Defense wins were strong, management noted Boeing/Airbus production-rate pull-through has not fully materialized and thus introduces upside uncertainty/timing risk to commercial aerospace recovery.
Company Guidance
Plexus guided Q2 revenue of $1.11–$1.15 billion (midpoint +6% sequential, +15% YoY), non‑GAAP operating margin of 5.6%–6.0%, non‑GAAP EPS $1.80–$1.95, and gross margin of 9.9%–10.2%; SG&A is expected to be $54–$55M (including ~$6.8M stock‑based comp), non‑operating expense ~ $5.3M, an effective tax rate of 16%–18%, and diluted shares of ~27.2M. For fiscal 2026 the company now sees the potential to meet or exceed the high end of its 9%–12% revenue growth goal, is reconfirming approximately $100M of free cash flow, and has raised FY capex to $100–$120M; Q2 cash is expected to be breakeven to slight usage with a cash cycle of 65–69 days (Q1 cash cycle was 69 days). Recent Q1 metrics that inform the guide included revenue $1.07B (10% YoY), non‑GAAP EPS $1.78, operating margin 5.8%, ROIC 13.2%, cash from ops used ~$16M, capex $35M, net cash position with $60M drawn on the revolver, 153k shares repurchased for $22.4M (≈$63M repurchase authority remaining), 22 wins worth $283M of annualized revenue (A&D $220M, Healthcare $40M, Industrial $23M), and a $3.6B qualified manufacturing funnel.Plexus Financial Statement Overview
Summary
Fundamentals are solid overall: revenue returned to modest TTM growth and profitability improved versus 2024. The balance sheet is a clear strength with low leverage and improving ROE, but confidence is tempered by thin gross margins (~10%) and a notable TTM free-cash-flow decline with historically uneven cash conversion.Income Statement
Revenue has stabilized and returned to modest growth in TTM (Trailing-Twelve-Months) (up ~2.3%) after a down year in 2024, showing improving demand/volume. Profitability has also recovered versus 2024: net margin is ~4.3% in TTM (Trailing-Twelve-Months) vs ~2.8% in 2024, and operating profitability is solid for the business (~5.0% operating margin; ~6.4% EBITDA margin). The main constraint is that gross margin remains thin (~10%) and overall margins are still below the stronger periods seen earlier in the cycle, leaving results more sensitive to cost and mix changes.72
Positive
Balance Sheet
Leverage is conservative: debt-to-equity is low in TTM (Trailing-Twelve-Months) (~0.15) and improved meaningfully from 2022–2023 levels, indicating reduced balance-sheet risk. Equity has grown steadily, supporting a solid capital base relative to assets. Returns are healthy and improving (return on equity ~12.4% in TTM (Trailing-Twelve-Months)), though not consistently rising every year, which suggests profitability can still be somewhat cyclical.83
Very Positive
Cash Flow
Cash generation is positive in TTM (Trailing-Twelve-Months) (operating cash flow ~$180M; free cash flow ~$111M), and free cash flow is a reasonable share of earnings (free cash flow is ~62% of net income). However, free cash flow has declined sharply versus last year (TTM (Trailing-Twelve-Months) free cash flow growth ~-27.6%), and cash conversion has been uneven historically, including a year with negative operating and free cash flow (2022). This variability reduces confidence in near-term cash durability despite overall profitability.64
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.13B | 4.03B | 3.96B | 4.21B | 3.81B | 3.37B |
| Gross Profit | 411.96M | 406.51M | 378.53M | 394.55M | 347.23M | 323.30M |
| EBITDA | 264.88M | 277.42M | 236.25M | 262.31M | 236.85M | 235.68M |
| Net Income | 176.80M | 172.88M | 111.81M | 139.09M | 138.24M | 138.91M |
Balance Sheet | ||||||
| Total Assets | 3.19B | 3.14B | 3.15B | 3.32B | 3.39B | 2.46B |
| Cash, Cash Equivalents and Short-Term Investments | 248.82M | 306.76M | 345.11M | 256.23M | 274.81M | 270.17M |
| Total Debt | 220.57M | 175.46M | 279.59M | 469.61M | 495.38M | 291.32M |
| Total Liabilities | 1.70B | 1.68B | 1.83B | 2.11B | 2.30B | 1.43B |
| Stockholders Equity | 1.48B | 1.45B | 1.32B | 1.21B | 1.10B | 1.03B |
Cash Flow | ||||||
| Free Cash Flow | 76.28M | 153.97M | 341.32M | 61.77M | -127.85M | 85.48M |
| Operating Cash Flow | 180.21M | 249.23M | 436.50M | 165.82M | -26.24M | 142.58M |
| Investing Cash Flow | -104.26M | -95.61M | -94.95M | -93.30M | -101.56M | -56.97M |
| Financing Cash Flow | -151.63M | -196.40M | -255.59M | -92.72M | 139.29M | -203.88M |
Plexus Technical Analysis
Neutral
194.13
Price Trends
178.58
Positive
162.04
Positive
148.32
Positive
Market Momentum
5.18
Positive
51.14
Neutral
43.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLXS, the sentiment is Neutral. The current price of 194.13 is below the 20-day moving average (MA) of 200.89, above the 50-day MA of 178.58, and above the 200-day MA of 148.32, indicating a neutral trend. The MACD of 5.18 indicates Positive momentum. The RSI at 51.14 is Neutral, neither overbought nor oversold. The STOCH value of 43.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PLXS.
Plexus Risk Analysis
Plexus disclosed 21 risk factors in its most recent earnings report. Plexus 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
Plexus Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.20B | 30.19 | 12.63% | ― | 1.82% | 56.52% | |
71 Outperform | $8.48B | 37.15 | 9.74% | ― | 7.40% | 13.79% | |
70 Outperform | $673.10M | 26.39 | 11.03% | 1.07% | 22.35% | 2.59% | |
68 Neutral | $4.70B | 32.34 | 18.33% | ― | 9.37% | 15.70% | |
66 Neutral | $2.06B | 84.44 | 3.37% | 1.44% | -2.93% | -40.33% | |
66 Neutral | $1.26B | 190.12 | 2.64% | ― | -6.13% | -76.92% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PLXS
Plexus
194.13
66.57
52.19%
BHE
Benchmark Electronics
57.81
20.57
55.22%
DAKT
Daktronics
25.78
11.18
76.58%
LYTS
Lsi Industries
21.62
3.98
22.58%
OSIS
OSI Systems
285.20
85.32
42.69%
SANM
Sanmina-Sci
155.26
78.87
103.25%
Plexus Corporate Events
Executive/Board ChangesShareholder Meetings
Plexus Shareholders Reelect Board and Approve Executive Pay
Positive
Feb 19, 2026
Plexus Corp. held its 2026 Annual Meeting of Shareholders on February 18, 2026, where shareholders elected all 10 board nominees to one-year terms, with each director receiving a strong majority of votes cast and a consistent level of broker non-votes. Investors also approved on an advisory basis the compensation of the company’s named executive officers and ratified the selection of PricewaterhouseCoopers LLP as independent auditors for fiscal 2026, signaling broad shareholder support for Plexus’s current governance, pay practices and oversight of its financial reporting.
The favorable voting outcomes across all proposals reinforce board stability and continuity in Plexus’s strategic direction at a time when reliable execution and financial transparency remain critical to stakeholders. By maintaining its existing leadership structure and audit relationship, the company preserves consistency in its corporate oversight framework, which may support investor confidence and operational focus in the coming fiscal year.
The most recent analyst rating on (PLXS) stock is a Buy with a $227.00 price target. To see the full list of analyst forecasts on Plexus stock, see the PLXS Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.