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Flex (FLEX) Moves 6.8% Higher: Will This Strength Last?

·2 min read

Flex (FLEX) shares ended the last trading session 6.8% higher at $18.55. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 4.6% gain over the past four weeks.

The increase in share price can be attributed to the reaffirming of the fourth quarter and fiscal 2022 guidance by the company at its virtual investor day held recently.

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 EPS is expected to be in the range of 32-37 cents.

For fiscal 2022, Flex continues to expect revenues between $25.4 billion and $25.8 billion. Adjusted earnings are expected in the $1.85-$1.90 per share band while GAAP EPS is expected to be in the range of $1.90-$1.95 per share.

This electronics designer and manufacturer is expected to post quarterly earnings of $0.44 per share in its upcoming report, which represents a year-over-year change of -10.2%. Revenues are expected to be $6.43 billion, up 2.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Flex, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FLEX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Flex is part of the Zacks Electronics - Miscellaneous Products industry. Universal Electronics (UEIC), another stock in the same industry, closed the last trading session 0.1% higher at $31.24. UEIC has returned -6.9% in the past month.

Universal Electronics' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.47. Compared to the company's year-ago EPS, this represents a change of -47.2%. Universal Electronics currently has a Zacks Rank of #5 (Strong Sell).


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