Flex Ltd. Reports Strong Growth in Data Center Manufacturing
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 04 2024
0mins
Should l Buy FLEX?
Source: Yahoo Finance
Flex Ltd. has seen its stock rise by 3.10%, reaching a 52-week high, amid positive market conditions with the Nasdaq-100 and S&P 500 both up.
The company's data center manufacturing segment grew by 50% year-over-year, with a forecasted 35% growth for the next year, indicating its crucial role in the rapidly expanding AI sector. Additionally, Flex's gross margin improved significantly, nearly doubling from 5.5% in 2020 to 8.4% in 2025, reflecting increased profitability and solidifying its competitive position in the contract manufacturing market.
These developments not only enhance Flex's revenue structure but also demonstrate its successful capital management through stock buybacks, which have bolstered investor confidence and positioned the company favorably in the market.
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Analyst Views on FLEX
Wall Street analysts forecast FLEX stock price to fall
7 Analyst Rating
7 Buy
0 Hold
0 Sell
Strong Buy
Current: 76.740
Low
74.00
Averages
76.71
High
85.00
Current: 76.740
Low
74.00
Averages
76.71
High
85.00
About FLEX
Flex Ltd. is end-to-end manufacturing partner that helps brands design, build, deliver and manage products. Its capabilities include design and engineering, supply chain, manufacturing, post-production and post-sale services, and proprietary products. Its segments include Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS). The FAS segment consists of various end markets, such as Communications, Enterprise and Cloud, including data infrastructure, edge infrastructure and communications infrastructure; Lifestyle, including appliances, floorcare, smart living and power tools, and Consumer Devices, including mobile and high velocity consumer devices. The FRS segment consists of end markets, such as Automotive, including compute platforms, power electronics, motion, and interface; Health Solutions, including medical devices, medical equipment and drug delivery, and Industrial, including capital equipment, industrial devices, renewables, embedded and critical power.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and potential buying opportunities.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on investor demand, impacting market liquidity.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in ETF shares outstanding helps identify those experiencing significant inflows or outflows, allowing investors to evaluate the impact on underlying holdings and make more informed decisions.
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Flex Ltd.: The King of Contract Manufacturing
- Data Center Growth: Flex's data center manufacturing segment grew by 50% year-over-year, with a forecasted 35% growth for the next year, indicating its crucial role in the rapidly expanding AI sector and enhancing its revenue structure.
- Margin Improvement: Flex's gross margin nearly doubled from 5.5% in 2020 to 8.4% in 2025, reflecting increased profitability in its high-value product lines and solidifying its competitive position in the contract manufacturing market.
- Earnings Per Share Growth: Over the past eight years, Flex has achieved an impressive 51% annual growth in earnings per share while reducing its share count by 27%, demonstrating successful capital management through stock buybacks that bolster investor confidence.
- Technological Trend Adaptation: Flex's transformation in designing, manufacturing, and managing high-end electronic products has positioned it as a critical player in global supply chains, particularly in automotive electronics and medical devices, further enhancing its market competitiveness.
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- Strategic Synergies: This acquisition will broaden Flex's critical power technology portfolio, deepen its utility presence, and enhance its engineered-to-order power distribution and control capabilities, thereby better addressing the increasing market demand.
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Flex Acquires EP2 for $1.1 Billion to Expand Power Portfolio
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- Strategic Implications: This acquisition broadens Flex's exposure to high-growth markets shaped by trends such as grid modernization and electrification, enhancing its capabilities in critical power technologies to meet increasing market demands.
- Strengthening Customer Relationships: EP2's long-standing customer relationships and engineering-driven culture will synergize with Flex's global capabilities, fostering mutual growth and ensuring the delivery of more reliable and innovative power solutions to clients.
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- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable technical insights for investors, aiding in market trend assessment and potential buying opportunities.
- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting the liquidity and market performance of the ETF.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs highlights those experiencing significant inflows or outflows, which not only affects the ETFs themselves but can also have substantial implications for the individual stocks held within them.
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Analysis of IJK Stock's 52-Week Performance
- Price Range Analysis: IJK's stock has a 52-week low of $75.87 and a high of $108.21, with the last trade at $105.16, indicating a relatively stable market performance that may attract investor interest.
- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and potential buying opportunities.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on investor demand, impacting market liquidity.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in ETF shares outstanding helps identify those experiencing significant inflows or outflows, allowing investors to evaluate the impact on underlying holdings and make more informed decisions.
See More
Flex Ltd.: The King of Contract Manufacturing
- Data Center Growth: Flex's data center manufacturing segment grew by 50% year-over-year, with a forecasted 35% growth for the next year, indicating its crucial role in the rapidly expanding AI sector and enhancing its revenue structure.
- Margin Improvement: Flex's gross margin nearly doubled from 5.5% in 2020 to 8.4% in 2025, reflecting increased profitability in its high-value product lines and solidifying its competitive position in the contract manufacturing market.
- Earnings Per Share Growth: Over the past eight years, Flex has achieved an impressive 51% annual growth in earnings per share while reducing its share count by 27%, demonstrating successful capital management through stock buybacks that bolster investor confidence.
- Technological Trend Adaptation: Flex's transformation in designing, manufacturing, and managing high-end electronic products has positioned it as a critical player in global supply chains, particularly in automotive electronics and medical devices, further enhancing its market competitiveness.
See More
Flex to Acquire Electrical Power Products for Approximately $1.1 Billion
- Acquisition Overview: Flex announced its agreement to acquire Electrical Power Products for approximately $1.1 billion, consisting of $1 billion in cash and $100 million in anticipated tax benefits, reflecting the company's strategic positioning in high-growth markets.
- Market Expansion Potential: This acquisition is expected to enhance Flex's exposure to long-term trends such as grid modernization, electrification, data center buildout, and U.S. reshoring, thereby increasing its competitiveness in high-margin sectors.
- Financial Expectations: Electrical Power Products is projected to generate $323 million in revenue for the fiscal year ending March 31, 2026, with anticipated double-digit organic growth and a mid- to high-teens adjusted EBITDA margin profile, bolstering Flex's financial performance.
- Industry Experience: With over 35 years of experience in designing, integrating, and manufacturing highly engineered control and relay panels, Electrical Power Products enriches Flex's product offerings for utility, power generation, and industrial customers.
See More
Flex Acquires EP2 for $1.1 Billion
- Acquisition Scale: Flex announced a definitive agreement to acquire EP2 for approximately $1.1 billion in an all-cash transaction, which is expected to positively impact adjusted EPS in the first full fiscal year post-close, reflecting the company's strategic expansion in electrical control and protection systems.
- Market Growth Potential: EP2 is projected to generate approximately $323 million in revenue for the fiscal year ending March 31, 2026, with anticipated double-digit organic growth, further enhancing Flex's competitiveness in the power modernization and electrification markets.
- Strategic Synergies: This acquisition will broaden Flex's critical power technology portfolio, deepen its utility presence, and enhance its engineered-to-order power distribution and control capabilities, thereby better addressing the increasing market demand.
- Management Outlook: Flex's CEO stated that the addition of EP2 will enable the company to play a larger role in modernizing the electrical infrastructure of the U.S., while EP2's customer-centric and engineering-driven culture will synergize with Flex's global capabilities to drive long-term growth.
See More
Flex Acquires EP2 for $1.1 Billion to Expand Power Portfolio
- Acquisition Overview: Flex has announced a definitive agreement to acquire Electrical Power Products, Inc. (EP2) for approximately $1.1 billion in cash, with the transaction expected to close in the first quarter of fiscal year 2027 and positively impact adjusted EPS post-acquisition.
- Market Outlook: With over 35 years of experience, EP2 is projected to generate approximately $323 million in revenue for the fiscal year ending March 31, 2026, and is expected to achieve double-digit organic growth, thereby enhancing Flex's competitive position in the power market.
- Strategic Implications: This acquisition broadens Flex's exposure to high-growth markets shaped by trends such as grid modernization and electrification, enhancing its capabilities in critical power technologies to meet increasing market demands.
- Strengthening Customer Relationships: EP2's long-standing customer relationships and engineering-driven culture will synergize with Flex's global capabilities, fostering mutual growth and ensuring the delivery of more reliable and innovative power solutions to clients.
See More
SPMD Stock Price Analysis and ETF Dynamics
- Price Fluctuation Analysis: SPMD's 52-week low is $43.99 and high is $63.67, with the current trading price at $58.91, indicating stock price volatility near its high, which may influence investor buying decisions.
- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable technical insights for investors, aiding in market trend assessment and potential buying opportunities.
- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting the liquidity and market performance of the ETF.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs highlights those experiencing significant inflows or outflows, which not only affects the ETFs themselves but can also have substantial implications for the individual stocks held within them.
See More
