It has been about a month since the last earnings report for Plexus (PLXS Quick QuotePLXS - Free Report) . Shares have added about 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 catalysts.

Plexus Q1 Earnings Miss Estimates, Guidance Lowered

Plexus reported first-quarter fiscal 2022 adjusted earnings of 88 cents per share, which missed the Zacks Consensus Estimate by 4.4% and decreased 28.5% year over year.

Revenues of $817.5 million matched the consensus mark but declined 1.6% year over year.

Asia-Pacific revenues rose 8.9% while that from Europe and the Middle East and Africa and the Americas declined 7.6% and 15.3%, respectively, in the reported quarter due to supplier delivery gaps.

Plexus won 41 manufacturing contracts during the quarter, worth $271 million in annualized revenues. Trailing four-quarter manufacturing wins totaled a record $1.1 billion in annualized revenues.

Market Sector Details

Industrial revenues fell 3.7% year over year to $364 million and accounted for 44.6% of total revenues.

Healthcare/Life Sciences revenues increased 7.8% from the year-ago quarter to $344 million. The sector accounted for 42.1% of total revenues.

Aerospace/Defense revenues decreased 18% year over year to $109 million and accounted for 13.3% of total revenues.

Notably, the top 10 customers of the company accounted for 56% of net revenues.

Operating Details

Gross profit on a GAAP basis decreased 11.7% year over year to $70 million. Gross margin contracted 90 basis points (bps) to 8.6%.

Selling and administrative expenses (4.6% of revenues) increased 15.7% from the year-ago quarter to $37.5 million.

Plexus reported adjusted operating income of $32.5 million, down 30.7% year over year. Adjusted operating margin contracted 160 bps to 4%.

Balance Sheet & Cash Flow

As of Jan 1, 2022, Plexus had cash & cash equivalents worth $218.4 million compared with $270.5 million as of Oct 2, 2021.

As of Jan 1, 2022, the company had long-term debt of $187.1 million compared with $187 million as of Oct 2, 2021.

In first-quarter fiscal 2022, cash flow used in operations was $89 million. The company reported a negative free cash flow of $122.2 million.

Guidance Lowered

For second-quarter fiscal 2022, revenues are projected between $820 million and $860 million compared with the prior outlook of $825 million to $865 million. The company lowered the guidance due to the ongoing supply chain disruptions from the pandemic.

GAAP operating margin for second-quarter fiscal 2022 is expected between 3.6% and 4% compared with the previous estimation of 4.6-5%. GAAP earnings are expected in the range of 76-92 cents per share compared with $1.01 to $1.17 projected earlier.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -19.74% due to these changes.

VGM Scores

Currently, Plexus has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Plexus has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.