JBL Stock Before Q4 Earnings: A Smart Buy or Risky Investment?

Jabil, Inc. JBL is scheduled to report fourth-quarter fiscal 2025 earnings on Sept. 25. The Zacks Consensus Estimate for sales and earnings is pegged at $7.6 billion and $2.95 per share, respectively. Earnings estimates for JBL have moved up 0.21% for 2025 and have declined 0.72% for 2026, over the past 60 days.

Earnings Surprise History

The leading electronics manufacturing services firm has had a solid earnings surprise history in the trailing four quarters, exceeding earnings expectations on all occasions. It delivered a four-quarter earnings surprise of 6.68%, on average.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Jabil for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Jabil currently has an ESP of +5.94% with a Zacks Rank #4. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping Upcoming Results

During the quarter, Jabil announced its plans to invest $500 million over the next several years in the Southeast U.S. region. The investment is focused on expanding manufacturing capabilities and workforce development for the cloud and AI data center infrastructure market. The strategic investment will strengthen Jabil’s position in the AI hardware supply chain.

Moreover, the localization of its production facilities will allow Jabil to better align and adjust its manufacturing with regional demand from hyperscaler customers. It will also protect the company from geopolitical volatility and tariff-related uncertainties. 

Jabil is affected by weak demand trends in multiple end markets. The Regulated Industries segment is plagued by weakness in the Auto & Transportation and Renewable & Energy Infrastructure verticals. The electric vehicle market in the United States remains soft. In the fourth quarter, per the Zacks Consensus Estimate, revenues in this segment are pegged at $2.9 billion, indicating a decline from $3 billion a year ago quarter.

Demand softness in consumer-centric products continues to impact growth in the Connected Living & Digital Commerce segment. Revenues from Connected Living & Digital Commerce are pegged at $1.31 billion, down from $1.44 billion.

Soft 5G demand continues to impact the networking and communications end market in the Intelligent Infrastructure segment. Revenues from this segment for the fourth quarter are pegged at $3.52 billion, indicating growth from $2.27 billion.

Price Performance

Over the past year, JBL has surged 95.8% compared with the industry’s growth of 141.8%. It has outperformed its peer Flex Ltd. FLEX but underperformed Celestica Inc. CLS. Flex has gained 76.5%, while Celestica has surged 417.2% during this period.

Key Valuation Metric

From a valuation standpoint, Jabil appears to be trading at a discount relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 20.02 forward earnings, lower than 25.4 for the industry but above its mean of 17.91.

Investment Considerations

Jabil’s top-line growth is expected to be hindered by demand softness in multiple end markets. Weakness in the renewable energy market and soft 5G demand are expected to impact revenue growth. Fluctuating demand patterns in the electric vehicle market, induced by changes in EV tariffs and government incentives in some regions, are hurting net sales.

The company operates in a highly competitive environment, facing competition from other industry leaders such as Flex, Sanmina and Celestica. Many of Jabil’s current and potential customers are assessing the merits of in-house manufacturing against the advantages of outsourcing. This trend can significantly impact its net sales growth.

Despite Jabil’s effort to strengthen its global manufacturing network and localized production to meet regional demand, it is exposed to supply chain issues stemming from global geopolitical unrest and macroeconomic headwinds. The initiative to expand local presence to mitigate tariff-related uncertainties is driving up costs. This is expected to create a margin squeeze in the near term.

End Note

Jabil’s prospects are affected by weak demand in the Regulated Industries and Connected Living & Digital Commerce segments. Stiff competition and high customer concentration risks are major headwinds. Macroeconomic challenges, geopolitical volatility, and tariff-related uncertainties are concerns. Despite healthy traction in AI data center, healthcare and warehouse automation, these factors will likely impact Jabil’s growth prospects in the near term. Owing to these factors, investors should avoid investing in Jabil’s stock at present.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research