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Here's Why Flex (FLEX) Warrants a Bullish Stance at the Moment
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Flex Ltd (FLEX - Free Report) has been witnessing an amazing run on the bourses of late.
Its shares have appreciated 18.4% in the past month, outperforming the broader industry’s growth of 11.2%. Also, Flex currently flaunts a Zacks Rank #1 (Strong Buy) and has a VGM Score of A.
Image Source: Zacks Investment Research
The company has been witnessing northbound earnings estimate revisions as well. The Zacks Consensus Estimate for its fiscal 2022 earnings has witnessed an upward revision of 5.03% over the past 60 days to $1.88 per share. The consensus mark moved 5.45% north for fiscal 2023 earnings. The company has an impressive earnings surprise history as well, having topped estimates in the trailing four quarters, the average surprise being 25.6%.
A successful investor understands the importance of adding well-performing stocks to the portfolio at the right time. Thus, with such healthy fundamentals, this stock appears to be a solid investment pick.
Key Performance Drivers
Singapore-based Flex is a provider of “Sketch-to-Scale” services to original equipment manufacturers (OEMs). The company provides end-to-end services i.e. designing, engineering, manufacturing as well as supply chain services and solutions.
The company benefits from strength across the Agility Solutions and Reliability Solutions segments along with a solid end-market focus on the back of emerging opportunities.
Flex’s diversified portfolio with an increased focus on end-markets like 5G, converged enterprise and cloud bodes well. The company is also likely to gain from robust momentum seen in Artificial Intelligence (AI), augmented and virtual reality (AR/VR), Industrial automation, autonomous/connected cars and other upcoming technologies.
Moreover, based on its growing intellectual property (IP) portfolio, the company is well-positioned to address the needs of customers looking to leverage the proliferation of advanced technologies.
Flex has expanded and enhanced its service offering with capabilities in 3D printing, automation, innovation labs, real-time supply chain software, machine-to-machine communications, advanced simulation & visualization, and AR/VR.
Flex thrives on low-cost manufacturing. The low-cost manufacturing improves the competitiveness of the company’s customers, which is a key catalyst. At the end of fiscal 2021, almost 80% of its manufacturing footprint was located in low-cost locations, such as Brazil, China, Hungary, India, Indonesia, Malaysia, Mexico, Poland, Romania and Ukraine.
Acquisitions, over time, have been Flex’s most favored mode for expanding its manufacturing footprint as well as penetrating new end-markets. Acquisitions like Bose facilities, Mirror Controls International (MCi), Alcatel-Lucent facility, and NEXTracker expanded its footprint in audio systems, automotive, telecom and smart solar tracking solution markets. Apart from these, the company has made several smaller acquisitions over time, which has expanded capabilities in the medical devices, consumer electronics, household, industrial and lifestyle markets.
Driven by strong demand across its segments, the company reaffirmed its fourth quarter and fiscal 2022 guidance at its virtual investor day, which bodes well for the future. For the fiscal fourth quarter, Flex continues to expect revenues between $6.2 billion and $6.6 billion. Adjusted earnings are expected in the 41-46 cents per share band, while GAAP earnings per share (EPS) is expected in the range of 32-37 cents.
For fiscal 2022, Flex continues to expect revenues between $25.4 billion and $25.8 billion. This reflects 6% year-over-year growth at the midpoint. Adjusted earnings are expected in the $1.85-$1.90 per share band, while GAAP EPS is estimated in the range of $1.90-$1.95.
Bel Fuse has a projected earnings growth rate of 3.65% for 2023. The Zacks Consensus Estimate for Bel Fuse’s 2023 earnings has been unchanged in the past 30 days.
Bel Fuse’s first-quarter 2022 EPS is estimated at 22 cents, suggesting year-over-year growth of 195.65%. Shares of BELFB have lost 15% in the past year.
American Software has a projected earnings growth rate of 24.24% for fiscal 2022. The Zacks Consensus Estimate for American Software’s fiscal 2022 earnings has been revised upward by 4 cents in the past 60 days.
American Software’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 92.14%. Shares of AMSWA have gained 1.8% in the past year.
Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.
Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have gained 4.2% in the past year.
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Here's Why Flex (FLEX) Warrants a Bullish Stance at the Moment
Flex Ltd (FLEX - Free Report) has been witnessing an amazing run on the bourses of late.
Its shares have appreciated 18.4% in the past month, outperforming the broader industry’s growth of 11.2%. Also, Flex currently flaunts a Zacks Rank #1 (Strong Buy) and has a VGM Score of A.
Image Source: Zacks Investment Research
The company has been witnessing northbound earnings estimate revisions as well. The Zacks Consensus Estimate for its fiscal 2022 earnings has witnessed an upward revision of 5.03% over the past 60 days to $1.88 per share. The consensus mark moved 5.45% north for fiscal 2023 earnings. The company has an impressive earnings surprise history as well, having topped estimates in the trailing four quarters, the average surprise being 25.6%.
A successful investor understands the importance of adding well-performing stocks to the portfolio at the right time. Thus, with such healthy fundamentals, this stock appears to be a solid investment pick.
Key Performance Drivers
Singapore-based Flex is a provider of “Sketch-to-Scale” services to original equipment manufacturers (OEMs). The company provides end-to-end services i.e. designing, engineering, manufacturing as well as supply chain services and solutions.
The company benefits from strength across the Agility Solutions and Reliability Solutions segments along with a solid end-market focus on the back of emerging opportunities.
Flex’s diversified portfolio with an increased focus on end-markets like 5G, converged enterprise and cloud bodes well. The company is also likely to gain from robust momentum seen in Artificial Intelligence (AI), augmented and virtual reality (AR/VR), Industrial automation, autonomous/connected cars and other upcoming technologies.
Moreover, based on its growing intellectual property (IP) portfolio, the company is well-positioned to address the needs of customers looking to leverage the proliferation of advanced technologies.
Flex has expanded and enhanced its service offering with capabilities in 3D printing, automation, innovation labs, real-time supply chain software, machine-to-machine communications, advanced simulation & visualization, and AR/VR.
Flex thrives on low-cost manufacturing. The low-cost manufacturing improves the competitiveness of the company’s customers, which is a key catalyst. At the end of fiscal 2021, almost 80% of its manufacturing footprint was located in low-cost locations, such as Brazil, China, Hungary, India, Indonesia, Malaysia, Mexico, Poland, Romania and Ukraine.
Acquisitions, over time, have been Flex’s most favored mode for expanding its manufacturing footprint as well as penetrating new end-markets. Acquisitions like Bose facilities, Mirror Controls International (MCi), Alcatel-Lucent facility, and NEXTracker expanded its footprint in audio systems, automotive, telecom and smart solar tracking solution markets. Apart from these, the company has made several smaller acquisitions over time, which has expanded capabilities in the medical devices, consumer electronics, household, industrial and lifestyle markets.
Driven by strong demand across its segments, the company reaffirmed its fourth quarter and fiscal 2022 guidance at its virtual investor day, which bodes well for the future. For the fiscal fourth quarter, Flex continues to expect revenues between $6.2 billion and $6.6 billion. Adjusted earnings are expected in the 41-46 cents per share band, while GAAP earnings per share (EPS) is expected in the range of 32-37 cents.
For fiscal 2022, Flex continues to expect revenues between $25.4 billion and $25.8 billion. This reflects 6% year-over-year growth at the midpoint. Adjusted earnings are expected in the $1.85-$1.90 per share band, while GAAP EPS is estimated in the range of $1.90-$1.95.
Other Key Picks
Other top-ranked from the broader technology space include Bel Fuse (BELFB - Free Report) , American Software (AMSWA - Free Report) and Iridium Communications (IRDM - Free Report) . While Bel Fuse flaunts a Zacks Rank of 1, American Software and Iridium carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bel Fuse has a projected earnings growth rate of 3.65% for 2023. The Zacks Consensus Estimate for Bel Fuse’s 2023 earnings has been unchanged in the past 30 days.
Bel Fuse’s first-quarter 2022 EPS is estimated at 22 cents, suggesting year-over-year growth of 195.65%. Shares of BELFB have lost 15% in the past year.
American Software has a projected earnings growth rate of 24.24% for fiscal 2022. The Zacks Consensus Estimate for American Software’s fiscal 2022 earnings has been revised upward by 4 cents in the past 60 days.
American Software’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 92.14%. Shares of AMSWA have gained 1.8% in the past year.
Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.
Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have gained 4.2% in the past year.