Plexus stock expected to show EPS growth in Q3:F25, Sidoti maintains Neutral

Investing.com

Published Jul 15, 2025 09:37AM ET

Plexus stock expected to show EPS growth in Q3:F25, Sidoti maintains Neutral

Investing.com - Sidoti maintained its Neutral rating and $135.00 price target on Plexus (NASDAQ:PLXS) in a research note published Tuesday. According to InvestingPro data, the company currently trades at a P/E ratio of 25.3x and boasts a perfect Piotroski Score of 9, indicating strong financial health.

The firm expects Plexus to deliver increased revenue, improved margins, and lower non-operating costs, driving earnings per share expansion in the third quarter of fiscal year 2025.

Plexus management has indicated expectations for sequential revenue improvement, with robust operating margin and prudent free cash flow deployment, according to Sidoti's research note.

The company is expected to continue benefiting from its diversified portfolio, market share gains, and growing outsourcing trends, while management has demonstrated prudent cost control, improved cash flow, and reduced debt levels.

Sidoti anticipates continued strong demand in the Defense sector and improving conditions in Healthcare/Life Sciences and Industrial segments, helped by robust growth in the semiconductor capital equipment market due to market share gains and new program wins, with potential benefits from Boeing's (NYSE:BA) ramping production.

In other recent news, Plexus Corporation reported its fiscal second-quarter results, surpassing earnings per share (EPS) expectations with $1.66 against a forecast of $1.54, representing a 7.79% surprise. However, the company reported revenue of $980.17 million, slightly missing the forecast of $981.4 million. Despite the revenue miss, Plexus has issued solid guidance for the fiscal third quarter, projecting a 6% year-over-year revenue increase, slightly above the Street's forecast. The company anticipates meaningful EPS growth for fiscal year 2025, driven by strategic investments and operational improvements.

Following these developments, Needham analysts adjusted their outlook on Plexus, lowering the price target to $162 from $172 while reaffirming a Buy rating. Benchmark analysts also maintained a Buy rating with a $160 price target, reflecting confidence in Plexus's growth prospects and operational strategies. The company is optimistic about continued sequential revenue growth into the fiscal fourth quarter, with expectations to conclude fiscal year 2025 with non-GAAP operating margins of 6% or higher.

In discussions with Plexus leadership, analysts noted that inventory levels are stabilizing, and end demand is showing signs of improvement, contributing to sustainable cash flow generation. The company is focusing on technology innovation to reduce costs and improve operational efficiencies, potentially enhancing operating margins. Plexus's diversified manufacturing operations and strong customer relationships across various market segments are seen as key factors providing stability amidst broader macroeconomic uncertainty.

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