Plexus (PLXS) Up 10.4% Since Last Earnings Report: Can It Continue?

Plexus (PLXS) shares have gained 10.4% since its Q3 fiscal 2025 earnings report, outperforming the S&P 500, as the company posted adjusted EPS of $1.90, significantly exceeding the $1.71 consensus, despite revenues of $1.018 billion slightly missing estimates but growing nearly 6% year-over-year. Key drivers included 41 new program wins estimated to contribute $250 million in annualized revenues and strong growth in Healthcare/Life Sciences and Asia-Pacific segments. For Q4 FY25, Plexus projects revenues of $1.025-$1.065 billion and non-GAAP EPS of $1.82-$1.97, with analyst estimates trending positively, leading to a Zacks Rank #3 (Hold) and an outlook for in-line stock returns.

Analysis

Plexus Corp. (PLXS) delivered a strong third-quarter fiscal 2025 performance, characterized by a significant earnings beat and subsequent share price outperformance of 10.4% against the S&P 500. The company reported an adjusted EPS of $1.90, comfortably exceeding the consensus estimate of $1.71 and its own guidance. While total revenues of $1.018 billion grew nearly 6% year-over-year, they slightly missed analyst forecasts. Growth was primarily driven by the Healthcare/Life Sciences segment, which increased 10.5%, and robust 14% growth in the Asia-Pacific region, which helped offset a material 14.6% decline in EMEA sales. Positive forward-looking indicators include 41 new manufacturing program wins expected to contribute $250 million in annualized revenue and an expanded $100 million share repurchase authorization. Profitability also improved, with the adjusted operating margin expanding 20 basis points to 6%. The company's Q4 guidance projects sequential revenue growth to between $1.025 billion and $1.065 billion with a stable operating margin, suggesting sustained operational momentum.

Key Decisions for Investors

• Given the strong EPS beat, solid pipeline of new business wins, and management's confidence signaled by an expanded buyback program, investors may find the fundamental picture supportive for a continued bullish outlook.
• It is crucial to monitor the performance of the EMEA region, which posted a significant 14.6% revenue decline, as well as the high customer concentration, with the top 10 clients accounting for 48% of revenue.
• Considering the stock's recent 10.4% rally and the neutral Zacks #3 (Hold) rating, investors might consider holding existing positions and awaiting the next earnings release for further confirmation of the growth trajectory before committing new capital.