Flex (NASDAQ:FLEX) Stock Falls 13.8% - Time to Sell?

Key Points

• Flex shares fell 13.8% to about $75.93 in midday trading, with volume 31% below its average; the article cites no clear company-specific negative catalyst for the selloff.
• Business updates were positive: Flex raised its fiscal 2027 outlook amid accelerating AI infrastructure demand, and its Cloud and Power Infrastructure revenue reportedly grew 54%. Its latest quarter also beat earnings and revenue estimates.
• Analyst sentiment remains broadly favorable despite several firms lowering price targets: the stock carries a consensus “Buy” rating and an average target of $131.78. Flex is also planning to spin off its CPI business as Axiom Solutions International, though execution and value creation are uncertain.

Flex Ltd. (NASDAQ:FLEX - Get Free Report) shares were down 13.8% during mid-day trading on Wednesday. The stock traded as low as $75.73 and last traded at $75.9290. 3,338,002 shares changed hands during mid-day trading, a decline of 31% from the average session volume of 4,867,858 shares. The stock had previously closed at $88.10.

Key Flex News

Here are the key news stories impacting Flex this week:

• Positive Sentiment: Flex raised its fiscal 2027 outlook as AI infrastructure demand accelerates and its Cloud and Power Infrastructure (CPI) business grows. CPI revenue reportedly surged 54%, with power solutions, liquid cooling and services adding to growth opportunities. FLEX Q2 Earnings Call Highlights Axiom Spin-Off and AI Growth
• Positive Sentiment: Zacks Research upgraded Flex from “hold” to “strong buy,” a positive signal about the firm’s prospects. Tickerreport.com report on Flex upgrade
• Positive Sentiment: Flex is advancing plans to spin off CPI as Axiom Solutions International, a move that could help investors value the cloud and power infrastructure business separately, though the outcome is not assured. Flex's 2027 Axiom Spin-Off: Will Two Firms Unlock Value for Investors?
• Neutral Sentiment: The articles provide no clear company-specific negative news to explain the decline. Investors may nonetheless be weighing spin-off execution and whether strong AI-related growth can be sustained.

Wall Street Analyst Weigh In

Several research analysts have weighed in on the stock. Robert W. Baird decreased their price objective on shares of Flex from $142.00 to $135.00 in a report on Monday, October 19th. Bank of America cut their target price on shares of Flex from $180.00 to $150.00 and set a "buy" rating on the stock in a research note on Tuesday, October 27th. Wall Street Zen raised shares of Flex from a "hold" rating to a "buy" rating in a research report on Saturday, September 26th. Raymond James Financial set a $170.00 price target on Flex and gave the stock an "outperform" rating in a research note on Wednesday, July 29th. Finally, Barclays lowered their price objective on Flex from $144.00 to $128.00 and set an "overweight" rating for the company in a report on Thursday, October 29th. Two research analysts have rated the stock with a Strong Buy rating, eight have assigned a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Buy" and a consensus target price of $131.78.

Flex Stock Performance

The company has a quick ratio of 0.85, a current ratio of 1.34 and a debt-to-equity ratio of 0.90. The stock has a 50 day simple moving average of $104.80 and a 200 day simple moving average of $103.06. The company has a market capitalization of $28.59 billion, a price-to-earnings ratio of 28.05, a P/E/G ratio of 0.39 and a beta of 1.80.

Flex (NASDAQ:FLEX - Get Free Report) last posted its earnings results on Wednesday, October 28th. The technology company reported $1.18 EPS for the quarter, beating the consensus estimate of $1.06 by $0.12. The company had revenue of $8.49 billion during the quarter, compared to analyst estimates of $8.17 billion. Flex had a return on equity of 24.93% and a net margin of 3.35%. The business's revenue was up 24.8% compared to the same quarter last year. During the same period in the prior year, the company earned $0.79 earnings per share. As a group, analysts anticipate that Flex Ltd. will post 4.52 earnings per share for the current fiscal year.

Insider Activity

In other news, insider Michael P. Hartung sold 2,755 shares of the company's stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $120.64, for a total transaction of $332,363.20. Following the completion of the transaction, the insider owned 243,175 shares in the company, valued at approximately $29,336,632. This 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 is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Company insiders own 0.62% of the company's stock.

Institutional Trading of Flex

Several hedge funds have recently added to or reduced their stakes in the business. KBC Group NV raised its position in Flex by 541.5% during the first quarter. KBC Group NV now owns 1,965,811 shares of the technology company's stock valued at $128,682,000 after buying an additional 1,659,384 shares during the period. Sei Investments Co. boosted its position in Flex by 52.2% during the 1st quarter. Sei Investments Co. now owns 2,230,622 shares of the technology company's stock worth $146,016,000 after acquiring an additional 764,558 shares during the period. Hsbc Holdings PLC grew its stake in Flex by 446.0% during the 1st quarter. Hsbc Holdings PLC now owns 290,062 shares of the technology company's stock valued at $18,905,000 after acquiring an additional 236,941 shares in the last quarter. Amundi grew its stake in Flex by 15.5% during the 1st quarter. Amundi now owns 1,494,418 shares of the technology company's stock valued at $97,825,000 after acquiring an additional 200,553 shares in the last quarter. Finally, SEB Asset Management AB acquired a new position in shares of Flex in the 1st quarter valued at about $11,411,000. Institutional investors own 94.30% of the company's stock.

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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