Flex (NASDAQ:FLEX) Shares Gap Up on Better-Than-Expected Earnings

Key Points

• Flex beat quarterly expectations: Adjusted EPS came in at $1.18 versus the $1.06 consensus, while revenue rose 24.8% year over year to $8.49 billion, exceeding estimates.
• AI demand is supporting growth: Robust demand for AI data-center and infrastructure products helped improve margins and contributed to a higher full-year outlook.
• Shares surged and analysts remain broadly positive: Flex opened at $89.50 after closing at $83.35, while analysts maintain a “Moderate Buy” consensus with an average price target of $128.70; a potential AI-infrastructure spinoff offers another catalyst.

Flex Ltd. (NASDAQ:FLEX - Get Free Report)'s stock price gapped up prior to trading on Wednesday following a stronger than expected earnings report. The stock had previously closed at $83.35, but opened at $89.50. Flex shares last traded at $91.1940, with a volume of 7,292,784 shares.

The technology company reported $1.18 EPS for the quarter, beating the consensus estimate of $1.06 by $0.12. Flex had a net margin of 3.32% and a return on equity of 23.15%. The firm had revenue of $8.49 billion during the quarter, compared to the consensus estimate of $8.17 billion. During the same quarter in the prior year, the firm earned $0.79 EPS. Flex's revenue for the quarter was up 24.8% on a year-over-year basis.

Flex News Summary

Here are the key news stories impacting Flex this week:

• Positive Sentiment: Earnings and revenue exceeded expectations: Flex reported adjusted earnings of $1.18 per share, ahead of the roughly $1.05–$1.06 consensus estimate and up from $0.79 a year earlier. Revenue rose 24.8% to $8.49 billion, surpassing analysts’ $8.17 billion forecast. Flex Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Margins improved: The company delivered a 4.9% GAAP operating margin and a 7.1% adjusted operating margin, supporting the view that stronger volume and operating execution are translating into better profitability. Flex Reports Second Quarter Fiscal 2027 Results
• Positive Sentiment: AI demand is driving growth: Reports attributed the earnings strength to robust demand for AI data-center and infrastructure products. Flex also raised its full-year outlook, providing an additional catalyst for the stock. FLEX Q2 Earnings Beat Estimates on CPI Strength, Outlook Raised
• Positive Sentiment: Potential AI-infrastructure spinoff: Investors are also focusing on Flex’s planned AI infrastructure spinoff, which could highlight the value of that business and provide a separate catalyst beyond the quarterly results. Flex Stock Rise on Earnings and Upcoming AI Infrastructure Spinoff

Wall Street Analysts Forecast Growth

Several research firms have recently commented on FLEX. Barclays cut their price target on Flex from $203.00 to $144.00 and set an "overweight" rating for the company in a research note on Thursday, July 30th. Freedom Capital upgraded shares of Flex from a "hold" rating to a "strong-buy" rating in a research report on Thursday, July 16th. Weiss Ratings lowered shares of Flex from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Thursday, September 17th. Robert W. Baird cut their price target on shares of Flex from $142.00 to $135.00 in a report on Monday, October 19th. Finally, The Goldman Sachs Group reduced their price objective on shares of Flex from $154.00 to $145.00 in a research report on Friday, October 16th. One research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $128.70.

Insider Transactions at Flex

In other Flex news, insider Michael P. Hartung sold 2,755 shares of the firm's stock in a transaction on Tuesday, August 18th. The stock was sold at an average price of $120.64, for a total value of $332,363.20. Following the completion of the sale, the insider owned 243,175 shares of the company's stock, valued at approximately $29,336,632. This trade represents a 1.12% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders own 0.62% of the company's stock.

Hedge Funds Weigh In On Flex

Institutional investors and hedge funds have recently made changes to their positions in the stock. MassMutual Private Wealth & Trust FSB boosted its holdings in Flex by 14.5% during the third quarter. MassMutual Private Wealth & Trust FSB now owns 783 shares of the technology company's stock worth $86,000 after buying an additional 99 shares in the last quarter. TD Waterhouse Canada Inc. grew its holdings in shares of Flex by 7.4% in the 2nd quarter. TD Waterhouse Canada Inc. now owns 1,449 shares of the technology company's stock worth $223,000 after acquiring an additional 100 shares during the period. JSF Financial LLC increased its stake in Flex by 0.6% in the 1st quarter. JSF Financial LLC now owns 20,504 shares of the technology company's stock valued at $1,342,000 after purchasing an additional 115 shares in the last quarter. WealthPlan Investment Management LLC increased its stake in Flex by 5.3% in the 3rd quarter. WealthPlan Investment Management LLC now owns 2,312 shares of the technology company's stock valued at $254,000 after purchasing an additional 116 shares in the last quarter. Finally, Glenview Trust Co increased its stake in Flex by 3.4% in the 1st quarter. Glenview Trust Co now owns 3,775 shares of the technology company's stock valued at $247,000 after purchasing an additional 125 shares in the last quarter. 94.30% of the stock is owned by institutional investors and hedge funds.

Flex Stock Performance

The firm has a fifty day moving average of $107.12 and a 200-day moving average of $102.40. The stock has a market capitalization of $33.68 billion, a price-to-earnings ratio of 35.20, a PEG ratio of 0.39 and a beta of 1.67. The company has a quick ratio of 0.89, a current ratio of 1.38 and a debt-to-equity ratio of 0.95.

About Flex

Flex Ltd. NASDAQ: FLEX is a global manufacturing and supply chain solutions provider. The company helps original equipment manufacturers design, engineer, manufacture, distribute and service products across their lifecycles.

Flex serves customers in industries including automotive, communications, consumer electronics, health care, industrial, lifestyle and cloud infrastructure. Its capabilities include product design and engineering, printed circuit board assembly, systems integration, supply chain management, logistics, and aftermarket services.

The company was founded in 1969 as Flextronics and later adopted the name Flex.

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