A month has gone by since the last earnings report for Plexus (PLXS Quick QuotePLXS - Free Report) . Shares have added about 10.9% 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 Top Estimates

Plexus Corp reported fourth-quarter fiscal 2023 adjusted earnings per share (EPS) of $1.44, which decreased 19.1% year over year. The Zacks Consensus Estimate was pegged at $1.26 per share.

Revenues of $1.02 billion decreased 8.9% year over year. The top-line performance was affected mainly from weakness in the Healthcare/Life Sciences and Industrial sectors. Revenues surpassed the Zacks Consensus Estimate by 0.4%.

In the reported quarter, revenues from Asia-Pacific declined 19.2%. Revenues from Europe, the Middle East and Africa and the Americas rose 27.1% and 2.4%, respectively.

In the fiscal fourth quarter, Plexus won 30 manufacturing contracts worth $192 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $946 million in annualized revenues. Plexus also noted that a funnel of qualified manufacturing opportunities now amounted to $3.7 billion, down $307 million from the fiscal third quarter.

Market Sector Details

Industrial revenues were down 19.8% year over year to $417 million, contributing 41% to total revenues.

Healthcare/Life Sciences’ revenues declined 3.8% from the year-ago quarter’s levels to $449 million, contributing 44% to total revenues.

Revenues from Aerospace/Defense increased 15.3% year over year to $158 million, contributing 15% to total revenues.

The top 10 customers of the company accounted for 48% of net revenues for the fiscal fourth quarter.

Operating Details

Gross profit on a GAAP basis decreased 9.7% year over year to $96.7 million.
Gross margin contracted 10 basis points (bps) to 9.4%.

Selling and administrative expenses decreased 3.1% from the year-ago quarter to $43.4 million.

PLXS reported an adjusted operating income of $53.3 million, down 14.4% year over year. Adjusted operating margin contracted 30 bps to 5.2%.

Balance Sheet & Cash Flow

As of Sep 30, 2023, Plexus had cash & cash equivalents worth $256.2 million compared with $252.9 million as of Jul 1, 2023.

As of Sep 30, 2023, PLXS had long-term debt and finance lease obligations, net of the current portion of $190.8 million compared with $187.5 million as of Jul 1, 2023.

In the quarter under review, the cash flow from operations was $89.8 million. Plexus reported a free cash flow of $65.6 million.

PLXS repurchased shares worth $3.4 million at an average price of $98.91 per share in the fiscal fourth quarter. It has shares worth $5.7 million left under its existing $50 million share repurchase authorization.

Guidance

For first-quarter fiscal 2024, revenues are projected to be between $990 million and $1.03 billion.

GAAP operating margin is expected to be between 4.8% and 5.3%. GAAP diluted EPS is expected to be in the range of $1.15-$1.33.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Plexus has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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 #4 (Sell). We expect a below average return from the stock in the next few months.