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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
▲(8.45% Upside)
The score is driven primarily by strong financial performance (growth, improving margins, low leverage) and a positive earnings outlook with sizable program wins. Offsetting factors are stretched technicals (overbought signals) and a premium valuation (P/E 30.7), plus near-term cash flow/working capital pressure highlighted on the call.
Positive Factors
Revenue growth and program wins
Sustained sequential revenue growth and double-digit YoY expansion indicate durable end-market demand and effective program ramp execution. Coupled with sizable new program wins, this supports multi-quarter revenue visibility, higher utilization, and deeper customer relationships that fortify long-term cash flows.
Low leverage and solid capital structure
Very low leverage and a healthy equity ratio provide financial flexibility to fund automation, absorb working-capital swings, and pursue selective buybacks or M&A. This balance-sheet strength reduces refinancing risk and supports durable investment in capacity and technology over the next several quarters.
Improving returns and margin progress
ROIC well above cost of capital signals efficient capital deployment and strong operational returns from high‑mix, complex EMS work. Incremental margin tailwinds from automation and new sites suggest sustainable profitability improvements as higher-margin programs scale over multiple quarters.
Negative Factors
Free cash flow deterioration
A material drop in FCF conversion reduces internal funding for capex and buybacks and increases reliance on liquidity to support growth. If working-capital needs or higher capex persist, persistent weaker FCF could constrain strategic flexibility and returns to shareholders over ensuing quarters.
Working-capital driven cash consumption
Management is prepositioning inventory and extending PO coverage to support anticipated ramps, lengthening the cash cycle. Structural increases in inventory and receivables during program ramp phases can pressure liquidity and raise financing costs, tempering near-term free cash generation.
Sector demand and timing uncertainty
Large A&D program wins boost the funnel, but commercial aerospace recovery timing is uncertain. Combined with pockets of Industrial softness, this raises the risk that booked wins take longer to convert into steady revenue, creating execution and margin timing risk over the next several quarters.
Plexus (PLXS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.48B
Dividend YieldN/A
Average Volume (3M)246.61K
Price to Earnings (P/E)31.7
Beta (1Y)1.09
Revenue Growth1.82%
EPS Growth56.52%
CountryUS
Employees20,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.78
Shares Outstanding26,759,184
10 Day Avg. Volume397,207
30 Day Avg. Volume246,610
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 Cap0.98
Enterprise Value/Revenue1.31
Enterprise Value/Gross Profit13.09
Enterprise Value/Ebitda20.36
Forecast
1Y Price Target
$208.67Price Target Upside2.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)7.46
Revenue Forecast (FY)$4.39B
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
Strong revenue growth and improving profitability support a solid fundamental profile, and leverage is low (debt-to-equity 0.12). The main offset is weaker cash conversion, with free cash flow down meaningfully despite healthy operating cash flow.Income Statement
Plexus demonstrates strong revenue growth with a 19.4% increase in the latest year, indicating a positive trajectory. The gross profit margin has improved slightly to 10.08%, and the net profit margin has increased to 4.29%, reflecting enhanced profitability. The EBIT margin also shows improvement, suggesting efficient operational management. However, the EBITDA margin has slightly decreased, indicating potential areas for cost optimization.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.12, indicating reduced leverage and a stronger equity position. Return on equity is healthy at 11.89%, showcasing effective use of equity to generate profits. The equity ratio stands at 46.37%, reflecting a solid financial structure. However, the total assets have slightly decreased, which could be a point of concern if it continues.78
Positive
Cash Flow
Operating cash flow remains strong, but free cash flow has decreased by 38.56%, which could impact future investments. The operating cash flow to net income ratio is 1.44, indicating good cash generation relative to net income. The free cash flow to net income ratio is 0.62, suggesting that while cash flow is positive, there is room for improvement in converting income into free cash flow.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 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 | 185.30M | 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 | 126.86M | 153.97M | 341.32M | 61.77M | -127.85M | 85.48M |
| Operating Cash Flow | 195.59M | 249.23M | 436.50M | 165.82M | -26.24M | 142.58M |
| Investing Cash Flow | -69.13M | -95.61M | -94.95M | -93.30M | -101.56M | -56.97M |
| Financing Cash Flow | -143.64M | -196.40M | -255.59M | -92.72M | 139.29M | -203.88M |
Plexus Technical Analysis
Positive
203.78
Price Trends
161.04
Positive
152.13
Positive
141.94
Positive
Market Momentum
11.40
Negative
76.01
Negative
84.08
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLXS, the sentiment is Positive. The current price of 203.78 is above the 20-day moving average (MA) of 177.12, above the 50-day MA of 161.04, and above the 200-day MA of 141.94, indicating a bullish trend. The MACD of 11.40 indicates Negative momentum. The RSI at 76.01 is Negative, neither overbought nor oversold. The STOCH value of 84.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $5.48B | 31.67 | 12.63% | ― | 1.82% | 56.52% | |
72 Outperform | $1.15B | 178.91 | 2.64% | ― | -6.13% | -76.92% | |
71 Outperform | $8.22B | 37.00 | 9.74% | ― | 7.40% | 13.79% | |
68 Neutral | $693.06M | 27.21 | 11.03% | 1.07% | 22.35% | 2.59% | |
68 Neutral | $4.16B | 29.03 | 18.33% | ― | 9.37% | 15.70% | |
64 Neutral | $1.92B | 52.66 | 3.37% | 1.44% | -2.93% | -40.33% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PLXS
Plexus
203.78
63.44
45.20%
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56.02
14.67
35.48%
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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.