Flex Ltd. shares have fallen 13.7% over the past three months, underperforming the Zacks Electronics – Miscellaneous Products industry's 6.2% gain and the S&P 500's 3.4% rise. The company reported first-quarter fiscal 2027 revenue up 21% year over year to $7.9 billion, with adjusted earnings per share of $1, driven by a 35% revenue surge in its Cloud and Power Infrastructure segment to $2.2 billion. Flex raised its full-year revenue guidance to a range of $33.7 billion to $35.2 billion and expects adjusted earnings per share between $4.42 and $4.74, with CPI revenue projected to jump 65% to 75%. However, margin pressure from heavy investment in new programs and one-time costs tied to the planned CPI spin-off are weighing on near-term profitability, with fiscal 2027 free cash flow conversion now seen at approximately 40% versus a prior 60% target. Zacks Investment Research currently rates Flex a Hold, suggesting existing investors maintain positions while new investors await a better entry point.
