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Why Is Plexus (PLXS) Up 11.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for Plexus (PLXS - Free Report) . Shares have added about 11.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Plexus Q4 Earnings Beat Estimates

Plexus reported fourth-quarter fiscal 2022 adjusted earnings of $1.78 per share, which surged 53.4% year over year. The Zacks Consensus Estimate stood at $1.28 per share.

Revenues of $1.12 billion topped the consensus mark by 11.1% and increased 33.3% year over year. The top-line performance gained from a robust demand environment amid global macroeconomic uncertainty and geopolitical instability in Europe.

In the reported quarter, Asia-Pacific revenues rose 39.5%, while that from Europe and the Middle East and Africa and the Americas increased 14.9% and 23.8%, respectively.

During the quarter, Plexus won 32 manufacturing contracts worth $214 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $1 billion in annualized revenues.

Market Sector Details

Industrial revenues were up 32.7% year over year to $520 million, contributing 46% to total revenues.

Healthcare/Life Sciences revenues jumped 40.2% from the year-ago quarter’s levels to $467 million. The segment contributed 42% to total revenues.

Aerospace/Defense revenues increased 16.1% year over year to $137 million, contributing 12% to total revenues.

The top 10 customers of the company accounted for 56% of net revenues for fiscal 2022.

Operating Details

Gross profit on a GAAP basis increased 35.6% year over year to $107.1 million. The gross margin expanded 10 basis points (bps) to 9.5%.
Selling and administrative expenses (4% of revenues) increased 22.3% from the year-ago quarter to $44.8 million.

Plexus reported an adjusted operating income of $62.3 million, up 47.2% year over year. Adjusted operating margin expanded 50 bps to 5.5%.

Balance Sheet & Cash Flow

As of Oct 1, Plexus had cash & cash equivalents worth $274.8 million compared with $276.6 million as of Jul 2.

As of Oct 1, the company had long-term debt and finance lease obligations, net of the current portion of $187.8 million compared with $184.7 million as of Jul 2.

In the quarter under review, the cash flow used in operations was $0.4 million. The company reported a free cash outflow of $17.1 million.

The company repurchased shares worth $3.5 million at an average price of $90.63 per share in the fiscal fourth quarter. As of Oct 1, the company had shares worth $46.5 million left under its existing share repurchase authorization. For fiscal 2022, the company repurchased shares worth $50.4 million under its share repurchase programs.

Guidance

For first-quarter fiscal 2023, revenues are projected between $1.08 billion and $1.13 billion. GAAP operating margin is expected to be between 5% and 5.5%. GAAP earnings are expected in the range of $1.40-$1.58 per share, including 20 cents of stock-based compensation expenses.

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 15.1% due to these changes.

VGM Scores

At this time, Plexus has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Plexus has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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