Shares of Flex (FLEX) have been strong performers lately, with the stock up 21.5% over the past month. The stock hit a new 52-week high of $52.17 in the previous session. Flex has gained 34.6% since the start of the year compared to the 8.2% gain for the Zacks Computer and Technology sector and the 16.8% return for the Zacks Electronics - Miscellaneous Products industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 7, 2025, Flex reported EPS of $0.73 versus consensus estimate of $0.69 while it beat the consensus revenue estimate by 2.73%.
For the current fiscal year, Flex is expected to post earnings of $2.9 per share on $25.92 in revenues. This represents a 9.43% change in EPS on a 0.43% change in revenues. For the next fiscal year, the company is expected to earn $3.27 per share on $27.11 in revenues. This represents a year-over-year change of 12.62% and 4.59%, respectively.
Valuation Metrics
While Flex has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Flex has a Value Score of A. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 17.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.6X. On a trailing cash flow basis, the stock currently trades at 13.2X versus its peer group's average of 13.3X. Additionally, the stock has a PEG ratio of 1.71. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Flex an interesting choice for value investors.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Flex currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Flex passes the test. Thus, it seems as though Flex shares could still be poised for more gains ahead.
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Flex Ltd. (FLEX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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