FLEX Should I Buy
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Flex Ltd is not a strong buy for a beginner, long-term investor at this time. While the company shows strong growth in certain segments, recent financial performance and lack of strong trading signals suggest waiting for better entry points.
The stock shows bullish momentum with MACD positively expanding, bullish moving averages (SMA_5 > SMA_20 > SMA_200), and RSI in the neutral zone. However, the stock is nearing a resistance level (R2: 77.613), which could limit immediate upside potential.
Flex's data center manufacturing segment grew by 50% YoY and is forecasted to grow 35% next year. Gross margin has improved significantly over the years, and the company has achieved a 51% annual growth in EPS over the past eight years while reducing its share count by 27%. Analysts are optimistic about the company's power business as an AI enabler.
Net income and EPS have declined YoY in the latest quarter. The RSI is approaching overbought territory, and the stock is near a key resistance level, which could limit short-term upside. No significant hedge fund or insider trading trends were observed.
In Q3 2026, revenue increased by 7.66% YoY, but net income dropped by 9.13% YoY, and EPS fell by 4.48% YoY. Gross margin improved to 9.49%, up 6.03% YoY, indicating operational efficiency but challenges in profitability.
Analysts are bullish on Flex, with Baird initiating coverage with an Outperform rating and a $70 price target, citing growth in the power business and margin improvement. Barclays raised the price target to $72, highlighting momentum in the data center portfolio.
