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Plexus (PLXS) Up 10.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Plexus (PLXS - Free Report) . Shares have added about 10.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Plexus Q2 Earnings Beat Estimates, Revenues Up Y/Y
Plexus reported second-quarter fiscal 2021 adjusted earnings of $1.49 per share that beat the Zacks Consensus Estimate by 19.2%. Moreover, the figure surged 144.3% year over year.
Revenues of $881 million meet the consensus mark. Moreover, the figure increased 14.9% year over year due to higher Americas and Europe, and the Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) revenues.
APAC revenues increased 18.3% year over year to $459 million. Moreover, EMEA revenues were $83 million, up 12.2%. Revenues in the Americas increased 9.3% to $365 million.
Plexus won 42 manufacturing contracts during the quarter, worth $284 million in annualized revenues. Trailing four-quarter manufacturing wins totaled more than $1 billion in annualized revenues.
Market Sector Details
Industrial revenues grew 20.1% year over year to $407 million and accounted for 46.2% of total revenues. Beginning first-quarter fiscal 2021, Plexus consolidated the previously reported Industrial/Commercial and Communications market sectors to form the Industrial market sector.
Healthcare/Life Sciences revenues increased 29.2% from the year-ago quarter to $350 million. The sector accounted for 39.7% of total revenues.
However, Aerospace/Defense revenues decreased 21% year over year to $124 million and accounted for 14.1% of total revenues.
Notably, the top 10 customers of the company accounted for 55% of net revenues.
Operating Details
Gross profit on a GAAP basis increased 49.2% year over year to $91.1 million. Gross margin expanded 240 basis points (bps) year over year to10.3%.
Selling and administrative expenses (4.3% of revenues) increased 0.1% from the year-ago quarter to $38.3 million.
Plexus reported adjusted operating income of $50.7 million, up 194.5% year over year. Adjusted operating margin expanded 350 bps on a year-over-year basis to 5.8%.
Balance Sheet & Cash Flow
As of Apr 3, 2021, Plexus had cash & cash equivalents worth $294.5 million compared with $356.9 million as of Jan 2, 2021.
Moreover, as of Apr 3, 2021, the company had long-term debt of $239 million compared with $188.1 million as of Jan 2, 2021.
In second-quarter fiscal 2021, cash flow provided by operations was $82.1 million. The company reported free cash flow of $74.8 million.
ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 17.3% for second-quarter fiscal 2021, much higher than Plexus’ weighted average cost of capital of 8.1%.
Guidance
For third-quarter fiscal 2021, revenues are projected between $875 million and $915 million. GAAP operating margin is expected between 5.1% and 5.6%.
GAAP earnings are expected between $1.23 and $1.38 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 9.32% due to these changes.
VGM Scores
At this time, Plexus has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Plexus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Plexus (PLXS) Up 10.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Plexus (PLXS - Free Report) . Shares have added about 10.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Plexus Q2 Earnings Beat Estimates, Revenues Up Y/Y
Plexus reported second-quarter fiscal 2021 adjusted earnings of $1.49 per share that beat the Zacks Consensus Estimate by 19.2%. Moreover, the figure surged 144.3% year over year.
Revenues of $881 million meet the consensus mark. Moreover, the figure increased 14.9% year over year due to higher Americas and Europe, and the Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) revenues.
APAC revenues increased 18.3% year over year to $459 million. Moreover, EMEA revenues were $83 million, up 12.2%. Revenues in the Americas increased 9.3% to $365 million.
Plexus won 42 manufacturing contracts during the quarter, worth $284 million in annualized revenues. Trailing four-quarter manufacturing wins totaled more than $1 billion in annualized revenues.
Market Sector Details
Industrial revenues grew 20.1% year over year to $407 million and accounted for 46.2% of total revenues. Beginning first-quarter fiscal 2021, Plexus consolidated the previously reported Industrial/Commercial and Communications market sectors to form the Industrial market sector.
Healthcare/Life Sciences revenues increased 29.2% from the year-ago quarter to $350 million. The sector accounted for 39.7% of total revenues.
However, Aerospace/Defense revenues decreased 21% year over year to $124 million and accounted for 14.1% of total revenues.
Notably, the top 10 customers of the company accounted for 55% of net revenues.
Operating Details
Gross profit on a GAAP basis increased 49.2% year over year to $91.1 million. Gross margin expanded 240 basis points (bps) year over year to10.3%.
Selling and administrative expenses (4.3% of revenues) increased 0.1% from the year-ago quarter to $38.3 million.
Plexus reported adjusted operating income of $50.7 million, up 194.5% year over year. Adjusted operating margin expanded 350 bps on a year-over-year basis to 5.8%.
Balance Sheet & Cash Flow
As of Apr 3, 2021, Plexus had cash & cash equivalents worth $294.5 million compared with $356.9 million as of Jan 2, 2021.
Moreover, as of Apr 3, 2021, the company had long-term debt of $239 million compared with $188.1 million as of Jan 2, 2021.
In second-quarter fiscal 2021, cash flow provided by operations was $82.1 million. The company reported free cash flow of $74.8 million.
ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 17.3% for second-quarter fiscal 2021, much higher than Plexus’ weighted average cost of capital of 8.1%.
Guidance
For third-quarter fiscal 2021, revenues are projected between $875 million and $915 million. GAAP operating margin is expected between 5.1% and 5.6%.
GAAP earnings are expected between $1.23 and $1.38 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 9.32% due to these changes.
VGM Scores
At this time, Plexus has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Plexus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.