U.S. markets closed
  • S&P 500

    4,060.43
    +44.21 (+1.10%)
     
  • Dow 30

    33,949.41
    +205.57 (+0.61%)
     
  • Nasdaq

    11,512.41
    +199.06 (+1.76%)
     
  • Russell 2000

    1,903.06
    +12.75 (+0.67%)
     
  • Crude Oil

    81.22
    +0.21 (+0.26%)
     
  • Gold

    1,932.50
    +2.50 (+0.13%)
     
  • Silver

    24.09
    +0.07 (+0.29%)
     
  • EUR/USD

    1.0902
    +0.0009 (+0.09%)
     
  • 10-Yr Bond

    3.4930
    +0.0310 (+0.90%)
     
  • GBP/USD

    1.2417
    +0.0010 (+0.08%)
     
  • USD/JPY

    129.7500
    -0.4030 (-0.31%)
     
  • BTC-USD

    22,995.74
    -123.67 (-0.53%)
     
  • CMC Crypto 200

    522.40
    -4.79 (-0.91%)
     
  • FTSE 100

    7,761.11
    +16.24 (+0.21%)
     
  • Nikkei 225

    27,431.39
    +68.64 (+0.25%)
     

Here's Why FLEX Seems a Good Stock to Add to Your Portfolio

Amid the ongoing volatility, investors may consider adding Flex Ltd FLEX stock to their investment portfolio to benefit from its solid fundamentals and growth prospects. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FLEX has a VGM Score of A. Per Zacks’ proprietary methodology, stocks with the combination of a Zacks Rank #1 or #2 and a VGM Score of A or B offer solid investment opportunities.

Flex has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, delivering an average earnings surprise of 18.5%. The stock has long-term earnings per share growth expectation of 12.8%.

The Zacks Consensus Estimate for fiscal 2023 earnings of $2.28 per share suggests growth of approximately 16.3% from the year-ago period. The estimate has been revised upward by 5.6% over the past 60 days. For fiscal 2024, the consensus mark for earnings is pegged at $2.42 per share, up 5.9% year over year. The estimate has been revised upward by 2.1% over the past 60 days

For revenues, the Zacks Consensus Estimate for fiscal 2023 is pegged at $29.6 billion, indicating an increase of 13.5% year over year. For fiscal 2024, the consensus mark is pegged at $30.3 billion, up 2.5%.

The stock has proved to be more resilient to volatility than the Zacks sub-industry it belongs to. In the past year, FLEX has lost 15.5% compared with a 43.4% decline of the Zacks sub-industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Strong Fundamental Drivers

Based in Singapore, Flex provides supply chain, technology innovation and manufacturing solutions to various industries across several end markets. The company is witnessing strong demand in the automotive and industrial sectors as well as continued strength in customer backlog. The company’s healthcare segment is being driven by strong demand for elective procedures as well as a continued ramp-up in large medical device programs.

FLEX is investing in high-growth markets like next-generation mobility, digital healthcare, cloud expansion, robotics, smart living and automation, among others. This bodes well for the long haul.

Driven by strong second-quarter fiscal 2023 results, Flex raised its revenue outlook for fiscal 2023. It now expects revenues between $29.1 billion and $30.1 billion compared with the earlier guidance of $28.4 billion and $29.4 billion.

However, the company’s performance is being affected by semiconductor shortages. The lack of panel availability continues to weigh on the Nextracker segment’s performance. Stiff competition, supply-chain issues, uncertainties in the global macroeconomic environment and leveraged balance sheet are headwinds.

Other Stocks to Consider

Some other top-ranked stocks from the broader technology space are Arista Networks ANET, Blackbaud BLKB and Jabil JBL. Arista Networks and Jabil currently sport a Zacks Rank #1, while Blackbaud carries a Zacks Rank #2.

The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.35 per share, up 7.7% in the past 60 days. The long-term earnings growth rate is anticipated at 17.5%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 5.5% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.59 per share, up 1.6% in the past 60 days. The long-term earnings growth rate is anticipated at 4%.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 4.9%. Shares of BLKB have declined 28.4% in the past year.

The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8% in the past 60 days. The long-term earnings growth rate is anticipated at 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 14.2% in the past year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Jabil, Inc. (JBL) : Free Stock Analysis Report

Flex Ltd. (FLEX) : Free Stock Analysis Report

Blackbaud, Inc. (BLKB) : Free Stock Analysis Report

Arista Networks, Inc. (ANET) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research