FLEX LTD (FLEX) Stock Fundamental Analysis
NASDAQ:FLEX - Nasdaq - SG9999000020 - Common Stock - Currency: USD
Taking everything into account, FLEX scores 6 out of 10 in our fundamental rating. FLEX was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. FLEX has an excellent profitability rating, but there are some minor concerns on its financial health. FLEX is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year FLEX was profitable.
FLEX had a positive operating cash flow in the past year.
In the past 5 years FLEX has always been profitable.
FLEX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.14%, FLEX belongs to the best of the industry, outperforming 88.33% of the companies in the same industry.
FLEX's Return On Equity of 32.47% is amongst the best of the industry. FLEX outperforms 95.83% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.54%, FLEX belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for FLEX is in line with the industry average of 8.95%.
The 3 year average ROIC (8.78%) for FLEX is below the current ROIC(17.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.14% | ||
| ROE | 32.47% | ||
| ROIC | 17.54% |
ROA(3y)4.69%
ROA(5y)3.71%
ROE(3y)18.79%
ROE(5y)15.47%
ROIC(3y)8.78%
ROIC(5y)8.58%
1.3 Margins
The Profit Margin of FLEX (3.54%) is better than 65.00% of its industry peers.
In the last couple of years the Profit Margin of FLEX has grown nicely.
Looking at the Operating Margin, with a value of 4.25%, FLEX is in the better half of the industry, outperforming 61.67% of the companies in the same industry.
FLEX's Operating Margin has improved in the last couple of years.
FLEX has a worse Gross Margin (7.98%) than 84.17% of its industry peers.
FLEX's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.25% | ||
| PM (TTM) | 3.54% | ||
| GM | 7.98% |
OM growth 3Y1.57%
OM growth 5Y11.92%
PM growth 3Y14.44%
PM growth 5Y60.75%
GM growth 3Y1.29%
GM growth 5Y4.39%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), FLEX is creating value.
The number of shares outstanding for FLEX has been reduced compared to 1 year ago.
FLEX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for FLEX has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.99 indicates that FLEX is not in any danger for bankruptcy at the moment.
FLEX has a better Altman-Z score (3.99) than 67.50% of its industry peers.
FLEX has a debt to FCF ratio of 2.39. This is a good value and a sign of high solvency as FLEX would need 2.39 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.39, FLEX is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
FLEX has a Debt/Equity ratio of 0.53. This is a neutral value indicating FLEX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.53, FLEX is not doing good in the industry: 76.67% of the companies in the same industry are doing better.
Although FLEX does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 3.99 |
ROIC/WACC2.06
WACC8.51%
2.3 Liquidity
A Current Ratio of 1.40 indicates that FLEX should not have too much problems paying its short term obligations.
FLEX's Current ratio of 1.40 is on the low side compared to the rest of the industry. FLEX is outperformed by 84.17% of its industry peers.
A Quick Ratio of 0.75 indicates that FLEX may have some problems paying its short term obligations.
The Quick ratio of FLEX (0.75) is worse than 88.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.4 | ||
| Quick Ratio | 0.75 |
3. Growth
3.1 Past
The earnings per share for FLEX have decreased by -2.73% in the last year.
The Earnings Per Share has been growing by 17.29% on average over the past years. This is quite good.
FLEX shows a strong growth in Revenue. In the last year, the Revenue has grown by 55.95%.
Measured over the past years, FLEX shows a small growth in Revenue. The Revenue has been growing by 0.16% on average per year.
EPS 1Y (TTM)-2.73%
EPS 3Y17.24%
EPS 5Y17.29%
EPS Q2Q%8.45%
Revenue 1Y (TTM)55.95%
Revenue growth 3Y3.07%
Revenue growth 5Y0.16%
Sales Q2Q%-7.7%
3.2 Future
Based on estimates for the next years, FLEX will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.90% on average per year.
Based on estimates for the next years, FLEX will show a decrease in Revenue. The Revenue will decrease by -0.05% on average per year.
EPS Next Y4.6%
EPS Next 2Y7.51%
EPS Next 3Y9.9%
EPS Next 5YN/A
Revenue Next Year-7.86%
Revenue Next 2Y-2.71%
Revenue Next 3Y-0.05%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.21, FLEX is valued correctly.
Based on the Price/Earnings ratio, FLEX is valued cheaply inside the industry as 86.67% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of FLEX to the average of the S&P500 Index (29.63), we can say FLEX is valued slightly cheaper.
With a Price/Forward Earnings ratio of 13.80, FLEX is valued correctly.
FLEX's Price/Forward Earnings ratio is rather cheap when compared to the industry. FLEX is cheaper than 85.83% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. FLEX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.21 | ||
| Fwd PE | 13.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FLEX indicates a rather cheap valuation: FLEX is cheaper than 94.17% of the companies listed in the same industry.
87.50% of the companies in the same industry are more expensive than FLEX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.5 | ||
| EV/EBITDA | 6.79 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FLEX does not grow enough to justify the current Price/Earnings ratio.
FLEX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.53
PEG (5Y)0.94
EPS Next 2Y7.51%
EPS Next 3Y9.9%
5. Dividend
5.1 Amount
FLEX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
40.36
-1.33 (-3.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners105.84%
Inst Owner Change0.63%
Ins Owners0.61%
Ins Owner Change-6.18%
Market Cap15.46B
Analysts82.5
Price Target49.29 (22.13%)
Short Float %2.79%
Short Ratio3.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)15.32%
Min EPS beat(2)11.38%
Max EPS beat(2)19.26%
EPS beat(4)4
Avg EPS beat(4)13.23%
Min EPS beat(4)0.69%
Max EPS beat(4)21.58%
EPS beat(8)8
Avg EPS beat(8)13.3%
EPS beat(12)12
Avg EPS beat(12)12.85%
EPS beat(16)16
Avg EPS beat(16)15.11%
Revenue beat(2)1
Avg Revenue beat(2)1.07%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)3.6%
Revenue beat(4)2
Avg Revenue beat(4)1.53%
Min Revenue beat(4)-1.46%
Max Revenue beat(4)4.85%
Revenue beat(8)4
Avg Revenue beat(8)0.93%
Revenue beat(12)8
Avg Revenue beat(12)2.03%
Revenue beat(16)11
Avg Revenue beat(16)1.86%
PT rev (1m)-0.49%
PT rev (3m)17.5%
EPS NQ rev (1m)4.73%
EPS NQ rev (3m)5.35%
EPS NY rev (1m)5.98%
EPS NY rev (3m)5.9%
Revenue NQ rev (1m)1.21%
Revenue NQ rev (3m)-7.66%
Revenue NY rev (1m)1.51%
Revenue NY rev (3m)1.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.21 | ||
| Fwd PE | 13.8 | ||
| P/S | 0.34 | ||
| P/FCF | 11.5 | ||
| P/OCF | 8.83 | ||
| P/B | 3.09 | ||
| P/tB | 4.26 | ||
| EV/EBITDA | 6.79 |
EPS(TTM)2.49
EY6.17%
EPS(NY)2.92
Fwd EY7.24%
FCF(TTM)3.51
FCFY8.69%
OCF(TTM)4.57
OCFY11.32%
SpS119.63
BVpS13.04
TBVpS9.47
PEG (NY)3.53
PEG (5Y)0.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.14% | ||
| ROE | 32.47% | ||
| ROCE | 22.21% | ||
| ROIC | 17.54% | ||
| ROICexc | 23.57% | ||
| ROICexgc | 29.83% | ||
| OM | 4.25% | ||
| PM (TTM) | 3.54% | ||
| GM | 7.98% | ||
| FCFM | 2.93% |
ROA(3y)4.69%
ROA(5y)3.71%
ROE(3y)18.79%
ROE(5y)15.47%
ROIC(3y)8.78%
ROIC(5y)8.58%
ROICexc(3y)12.66%
ROICexc(5y)12.43%
ROICexgc(3y)16.89%
ROICexgc(5y)16.71%
ROCE(3y)11.11%
ROCE(5y)10.86%
ROICexcg growth 3Y-7.37%
ROICexcg growth 5Y-3.32%
ROICexc growth 3Y-5.28%
ROICexc growth 5Y0.53%
OM growth 3Y1.57%
OM growth 5Y11.92%
PM growth 3Y14.44%
PM growth 5Y60.75%
GM growth 3Y1.29%
GM growth 5Y4.39%
F-Score7
Asset Turnover2.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 2.39 | ||
| Debt/EBITDA | 1.07 | ||
| Cap/Depr | 74.27% | ||
| Cap/Sales | 0.89% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.18% | ||
| Profit Quality | 82.86% | ||
| Current Ratio | 1.4 | ||
| Quick Ratio | 0.75 | ||
| Altman-Z | 3.99 |
F-Score7
WACC8.51%
ROIC/WACC2.06
Cap/Depr(3y)105.66%
Cap/Depr(5y)88.08%
Cap/Sales(3y)1.93%
Cap/Sales(5y)1.83%
Profit Quality(3y)60.31%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.73%
EPS 3Y17.24%
EPS 5Y17.29%
EPS Q2Q%8.45%
EPS Next Y4.6%
EPS Next 2Y7.51%
EPS Next 3Y9.9%
EPS Next 5YN/A
Revenue 1Y (TTM)55.95%
Revenue growth 3Y3.07%
Revenue growth 5Y0.16%
Sales Q2Q%-7.7%
Revenue Next Year-7.86%
Revenue Next 2Y-2.71%
Revenue Next 3Y-0.05%
Revenue Next 5YN/A
EBIT growth 1Y38.77%
EBIT growth 3Y4.69%
EBIT growth 5Y12.09%
EBIT Next Year24.56%
EBIT Next 3Y13.11%
EBIT Next 5YN/A
FCF growth 1Y355.59%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y103.61%
OCF growth 3Y109.6%
OCF growth 5YN/A