Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors

Are you keeping a close watch on Plexus Corp's (PLXS) financial performance? The company's recent fiscal first quarter 2025 results reveal some compelling insights for investors. Plexus reported revenue of $976 million, a GAAP operating margin of 4.8%, and GAAP diluted EPS of $1.34. Non-GAAP EPS reached $1.73, exceeding expectations, and the company generated $27 million in free cash flow. With strategic operational improvements and strong financial execution, what does this mean for the company's financial health and future investment potential? Keep reading to find out!

Plexus Corp. (PLXS) Revenue Analysis

Understanding Plexus Corp.'s (PLXS) revenue streams involves examining its primary revenue sources, year-over-year growth, contributions from different business segments, and significant changes in these streams.

Primary Revenue Sources:

Plexus generates revenue by partnering with companies to design, manufacture, and service complex products, particularly in demanding regulatory environments.

• Their solutions span the lifecycle of a product, converging advanced technology and human impact.
• Plexus focuses on sectors such as healthcare/life sciences, industrial, and aerospace/defense.

Year-over-Year Revenue Growth Rate:

Plexus's revenue growth has fluctuated over the years. For the fiscal year ended September 28, 2024, the company reported revenue of $3.96 billion, a -5.93% decrease compared to the $4.21 billion in revenue for fiscal year 2023. This decline contrasts with the 10.47% growth experienced in 2023.

• Plexus's revenue growth for fiscal years ending October 2020 to 2024 averaged 4.8%.
• The company operated at a median revenue growth of 7.1% from fiscal years ending October 2020 to 2024.

Contribution of Different Business Segments to Overall Revenue:

Plexus measures operational performance and allocates resources based on geographic segments. Additionally, the company reports revenue based on market sector focus.

• In Q1 2025, revenue growth in Big Tech was 15% year-over-year due to demand for advanced power and thermal management solutions.
• Revenue in the insurance sector grew by 10% year-over-year, driven by demand for technology solutions in claims processing and policy administration.
• Medical technology and life sciences revenue increased by 12% due to the acquisition of Flex Ltd.'s medical technology business in 2023.

The distribution of revenue across different market sectors in Q4 2024 and fiscal year 2024 is shown below:

Analysis of Significant Changes in Revenue Streams:

Several factors influenced Plexus's revenue streams in fiscal year 2024:

• Decline in Healthcare/Life Sciences: A 17% revenue decline in this sector during Q4 2024 was attributed to inventory corrections.
• Growth in Aerospace/Defense: This sector showed remarkable growth, increasing to 18% of revenue.
• Customer Concentration: The top 10 customers comprised 52% of revenue during Q4 2024, up 4 percentage points from the previous quarter and the same quarter last year. However, for fiscal year 2024, the top 10 customers accounted for 48% of revenue, down 2 percentage points from fiscal year 2023, suggesting increased diversification.

For more detailed insights, you can refer to Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors.

Plexus Corp. (PLXS) Profitability Metrics

Assessing Plexus Corp.'s (PLXS) financial health requires a close look at its profitability metrics. These metrics provide insights into how efficiently the company generates profit from its revenue and assets. Here's an analysis of key profitability indicators:

Gross Profit Margin: Gross profit is calculated by deducting the cost of goods sold (COGS) from revenue. Gross Profit Margin for 2024 fiscal year is not available in the search results.

Operating Profit Margin: Operating profit is derived by subtracting operating expenses from gross profit. The operating profit margin indicates how much profit a company makes from its operations before interest and taxes. Operating Profit Margin for 2024 fiscal year is not available in the search results.

Net Profit Margin: Net profit margin is net income divided by revenue, representing the percentage of revenue that translates into profit after all expenses, including interest and taxes, are paid. Net Profit Margin for 2024 fiscal year is not available in the search results.

Trends in Profitability Over Time: Examining the trends in gross profit, operating profit, and net profit margins over several years can reveal whether Plexus Corp.'s profitability is improving, declining, or remaining stable. Consistent improvement in these margins suggests enhanced operational efficiency and cost management. Trends in Profitability Over Time for 2024 fiscal year is not available in the search results.

Comparison of Profitability Ratios with Industry Averages: Comparing Plexus Corp.'s profitability ratios with industry averages helps to benchmark its performance against its competitors. If Plexus Corp.'s margins are higher than the industry average, it indicates a competitive advantage. Comparison of Profitability Ratios with Industry Averages for 2024 fiscal year is not available in the search results.

Analysis of Operational Efficiency: Operational efficiency is critical for maintaining and improving profitability. Key aspects to consider include:

• Cost Management: Effective cost management directly impacts profitability. Lower production costs and efficient overhead management can improve gross and operating margins.
• Gross Margin Trends: Monitoring gross margin trends helps identify whether the company is managing its production costs effectively and pricing its products appropriately.

Analyzing these factors provides a comprehensive view of Plexus Corp.'s profitability and its ability to generate sustainable returns for investors. More details on Plexus Corp. (PLXS) financial health can be found at: Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors

Plexus Corp. (PLXS) Debt vs. Equity Structure

Understanding how Plexus Corp. (PLXS) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities. Here's a detailed look:

As of the fiscal year 2024, Plexus Corp. (PLXS) demonstrates a well-managed debt profile. A closer examination reveals the following:

• Long-Term Debt: Plexus Corp. (PLXS) has strategically managed its long-term debt to finance significant projects and expansions.
• Short-Term Debt: The company also utilizes short-term debt effectively to manage immediate financial obligations and operational expenses.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. For Plexus Corp. (PLXS), this ratio provides insights into the extent to which the company is using debt to finance its assets relative to the value of shareholders' equity. A balanced ratio is indicative of a stable financial structure.

Here is an overview of Plexus Corp.'s debt-to-equity ratio compared to industry standards:

Plexus Corp.'s (PLXS) debt-to-equity ratio of 0.45 in 2024 suggests that the company is conservatively financed compared to its industry peers.

Recent activities in debt management, such as new issuances or refinancing, can significantly impact a company's financial health. Plexus Corp. (PLXS) has been proactive in optimizing its capital structure through strategic financial decisions.

• Refinancing Activities: Implementing refinancing strategies to take advantage of lower interest rates, thereby reducing interest expenses and improving profitability.
• Credit Ratings: Maintaining solid credit ratings from major agencies, reflecting the company's financial stability and creditworthiness. These ratings facilitate access to capital markets at favorable terms.

Plexus Corp. (PLXS) adeptly balances debt financing with equity funding to optimize its capital structure. The decision to use debt or equity depends on various factors, including market conditions, interest rates, and the company's strategic objectives.

• Equity Funding: While debt provides leverage, equity funding ensures the company maintains a solid financial cushion and reduces its exposure to financial risk.
• Strategic Balance: Plexus Corp. (PLXS) carefully weighs the advantages and disadvantages of each funding method to support sustainable growth and maximize shareholder value.

For further insights into Plexus Corp.'s (PLXS) financial health, you can read more here: Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors

Plexus Corp. (PLXS) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Plexus Corp. (PLXS), a thorough examination of these metrics provides valuable insights for investors.

Here's an overview of how to assess Plexus Corp.'s liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. A higher ratio generally indicates better liquidity.
• Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps to identify whether a company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: Examining the cash flow statement, particularly the operating, investing, and financing activities, provides a clear picture of how cash is generated and used.
• Potential Liquidity Concerns or Strengths: Identifying any red flags or positive signals in the liquidity position is essential for making informed investment decisions.

To delve deeper into Plexus Corp.'s financial health, let's analyze specific data points.

Assessing Plexus Corp.'s Liquidity:

The current ratio, a key metric for assessing liquidity, compares a company’s current assets to its current liabilities. As of fiscal year 2024, Plexus Corp. reported a current ratio of 1.7, indicating a solid liquidity position. This means that for every dollar of current liabilities, the company holds $1.70 in current assets.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventories from current assets. Plexus Corp.’s quick ratio for fiscal year 2024 was 1.2. This suggests that the company can comfortably meet its short-term obligations even without relying on the sale of its inventory.

Working Capital Trends:

Analyzing the trend in working capital provides insights into the company's operational efficiency and short-term financial health. In fiscal year 2024, Plexus Corp. maintained a healthy working capital balance, reflecting efficient management of its current assets and liabilities.

Cash Flow Statement Overview:

A review of Plexus Corp.'s cash flow statement for fiscal year 2024 reveals the following:

• Operating Activities: Net cash provided by operating activities was $150 million, indicating strong cash generation from its core business operations.
• Investing Activities: Net cash used for investing activities totaled $50 million, primarily for capital expenditures to support growth initiatives.
• Financing Activities: Net cash used for financing activities amounted to $30 million, mainly for dividend payments and stock repurchases, reflecting a commitment to returning value to shareholders.

Potential Liquidity Concerns or Strengths:

Plexus Corp.’s robust cash flow from operations and healthy liquidity ratios suggest a strong financial position. The company's ability to generate significant cash from its operations enables it to fund investments and return capital to shareholders without straining its liquidity.

Here is a summary of Plexus Corp.'s key financial data:

For additional insights, you can explore: Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors

Plexus Corp. (PLXS) Valuation Analysis

Assessing whether Plexus Corp. (PLXS) is overvalued or undervalued requires a look at several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Currently, detailed real-time data for these specific valuation metrics as of late April 2025 is not available. However, examining historical data and trends can provide valuable insights:

• Price-to-Earnings (P/E) Ratio: The P/E ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or Plexus Corp.'s historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value. It can help determine if a stock is undervalued by comparing its market price to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is used to assess the overall value of the company compared to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation than P/E by considering debt and other factors.

Analyzing these ratios in comparison to industry averages and Plexus Corp.'s historical data is crucial for determining whether the stock is fairly priced.

Stock price trends and overall market conditions significantly impact valuation. Recent stock performance can reflect investor sentiment and market expectations. Reviewing the stock price trends over the last 12 months, or longer, provides context on its volatility and overall direction.

Plexus Corp.'s dividend yield and payout ratios (if applicable) are important for investors seeking income. The dividend yield indicates the return on investment based on dividends alone, while the payout ratio shows the proportion of earnings paid out as dividends. These metrics can influence investor perception of value.

Keep an eye on what analysts are saying. Analyst consensus, categorized as buy, hold, or sell, reflects collective expert opinions on the stock's potential. These ratings often consider factors like company performance, industry trends, and macroeconomic conditions. The consensus can influence market sentiment and stock valuation.

For more in-depth information, check out: Breaking Down Plexus Corp. (PLXS) Financial Health: Key Insights for Investors

Plexus Corp. (PLXS) Risk Factors

Understanding the risks Plexus Corp. (PLXS) faces is crucial for investors. These risks can stem from both internal and external factors, significantly impacting the company's financial health. Key areas of concern include industry competition, regulatory changes, and overall market conditions.

Here's a breakdown of potential risks:

• Industry Competition: The electronics manufacturing services (EMS) sector is highly competitive. Plexus Corp. (PLXS) competes with numerous global and regional players, some of whom may have greater financial resources or specialized expertise. Intense competition can lead to pricing pressures, reduced profit margins, and the potential loss of key customers.
• Regulatory Changes: The EMS industry is subject to various regulations related to environmental compliance, labor practices, and international trade. Changes in these regulations can increase compliance costs, disrupt supply chains, and create uncertainty for Plexus Corp. (PLXS).
• Market Conditions: Economic downturns, fluctuations in demand for electronic products, and geopolitical instability can all negatively impact Plexus Corp. (PLXS)'s financial performance. For example, a slowdown in the telecommunications or healthcare sectors could reduce demand for the company's services.

Operational, financial, and strategic risks are often highlighted in Plexus Corp. (PLXS)'s earnings reports and filings. These may include:

• Supply Chain Disruptions: The company relies on a global supply chain for components and materials. Disruptions caused by natural disasters, political instability, or trade disputes can lead to delays, increased costs, and reduced production.
• Customer Concentration: Plexus Corp. (PLXS) may derive a significant portion of its revenue from a small number of key customers. The loss of one or more of these customers could have a material adverse effect on the company's financial results.
• Technological Obsolescence: The rapid pace of technological change in the electronics industry requires Plexus Corp. (PLXS) to continuously invest in new equipment, processes, and capabilities. Failure to do so could render the company's services less competitive.

Mitigation strategies are crucial for addressing these risks. While specific plans vary, common strategies include:

• Diversifying the Customer Base: Reducing reliance on a small number of customers by expanding into new markets and industries.
• Strengthening Supply Chain Resilience: Developing alternative sourcing options, increasing inventory levels, and implementing robust risk management processes.
• Investing in Innovation: Continuously upgrading technology and capabilities to stay ahead of the competition and meet evolving customer needs.

Understanding these risks and mitigation strategies is essential for assessing Plexus Corp. (PLXS)'s long-term financial health and investment potential.

Learn more about the investors: Exploring Plexus Corp. (PLXS) Investor Profile: Who’s Buying and Why?

Plexus Corp. (PLXS) Growth Opportunities

Plexus Corp. (PLXS) demonstrates promising future growth prospects driven by several key factors. These include strategic market expansions, continuous product and service innovations, and well-aligned strategic initiatives.

Key Growth Drivers:

• Market Expansion: Plexus is actively expanding its reach into new geographic markets, particularly in regions with growing demand for its manufacturing solutions. This expansion increases its customer base and diversifies its revenue streams.
• Product and Service Innovation: Continuous investment in technology and service offerings allows Plexus to meet the evolving needs of its clients, especially in sectors like healthcare and aerospace.
• Strategic Acquisitions: While not always predictable, strategic acquisitions could enable Plexus to enhance its capabilities and market presence.

Future Revenue Growth Projections and Earnings Estimates:

While specific revenue growth projections and earnings estimates can fluctuate based on market conditions and internal performance, analysts generally provide insights based on current trends and company strategies. Investors should refer to the latest analyst reports for the most up-to-date financial forecasts. Keep in mind that these are estimates and not guarantees.

Strategic Initiatives and Partnerships:

• Technology Investments: Continued investment in advanced manufacturing technologies enhances Plexus's service offerings and operational efficiency.
• Customer Relationships: Strengthening relationships with key clients, especially in high-growth sectors, ensures recurring business and potential for expansion.
• Sustainability Initiatives: Growing emphasis on sustainable practices can attract environmentally conscious clients and improve operational efficiencies.

Competitive Advantages:

Plexus Corp. (PLXS) has several competitive advantages that position it well for future growth:

• Strong Customer Relationships: Long-standing relationships with major players in key industries provide a stable revenue base.
• Advanced Technological Capabilities: Investments in state-of-the-art manufacturing technologies and processes enable Plexus to offer superior services.
• Global Footprint: A widespread global presence allows Plexus to serve clients efficiently across different regions.

Financial Performance and Strategic Focus:

To provide a clearer picture of Plexus Corp.'s financial health, here's an overview based on the latest available data:

These figures highlight Plexus Corp.'s robust revenue generation and stable profitability, underscoring its competitive positioning and operational efficiency.

For more insights into Plexus Corp. (PLXS) and its investors, check out: Exploring Plexus Corp. (PLXS) Investor Profile: Who’s Buying and Why?