A month has gone by since the last earnings report for Plexus (PLXS Quick QuotePLXS - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Plexus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Plexus Q3 Earnings Top Estimates

Plexus reported third-quarter fiscal 2024 adjusted earnings per share (EPS) of $1.45, down 0.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.28 per share.

Revenues of $961 million decreased 6% year over year. The top-line contraction was due to poor performance in the Healthcare/Life Sciences and Industrial sectors. Revenues missed the Zacks Consensus Estimate by 1.95%.

In the reported quarter, revenues from the Asia-Pacific and America declined 8.7% and 10.5%, respectively. Revenues from Europe, the Middle East and Africa rose 30.5%.

During the fiscal third quarter, Plexus won 35 manufacturing programs, which are estimated to contribute $279 million in annualized revenues once fully ramped into production.

Market Sector Details

Industrial revenues were down 5.8% year over year to $403 million, contributing 42% to total revenues.

Healthcare/Life Sciences’ revenues declined 15.7% from the year-ago quarter’s levels to $380 million, contributing 40% to total revenues.

Revenues from Aerospace/Defense increased 24.5% year over year to $178 million, contributing 18% to total revenues.

The company’s top 10 customers accounted for 48% of net revenues in the fiscal third quarter.

Operating Details

Gross profit on a GAAP basis increased 0.8% year over year to $94.4 million.

Selling and administrative expenses increased 8.5% from the year-ago quarter to $45.9 million.

Plexus reported an adjusted operating income of $55.6 million, up 1% year over year. Adjusted operating margin expanded 90 basis points sequentially to 5.8%.

Balance Sheet & Cash Flow

As of Jun 29, 2024, Plexus had cash & cash equivalents worth $269.8 million compared with $252.9 million as of Jul 1, 2023.

As of Jun 30, 2024, Plexus had long-term debt and finance lease obligations, net of the current portion of $90.7 million compared with $187.5 million as of Jul 1, 2023.

In the quarter under review, the cash flow from operations was $131.6 million. Plexus reported a free cash outflow of $114.2 million.

The company repurchased $18.6 million of its shares at an average price of $100.64 per share under its repurchase program. This leaves shares worth $19.5 million available under the existing $50 million authorization.

Outlook

For fourth-quarter fiscal 2024, revenues are projected to be between $990 million and $1.03 billion.

GAAP operating margin is expected to be between 4.6% and 5%. GAAP EPS is expected to be in the band of $1.14-$1.29.

Adjusted EPS is expected in the range of $1.5-$1.65.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Plexus has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Plexus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.