On Friday, Needham, a well-known investment firm, increased its price target for Plexus Corp (NASDAQ:PLXS) to $162.00, up from the previous target of $144.00. The firm maintained its Buy rating on the stock. The adjustment follows Plexus's report of a slower start to Fiscal Year 2025 (F25), attributed in part to demand pull-ins during the fourth quarter of Fiscal Year 2024 (FQ4).
Plexus reported a 3% year-over-year increase in FQ4 revenue, surpassing its own guidance range of a 3% decline to a 0.6% rise. The company's adjusted earnings per share (EPS) also exceeded the high end of its guidance, benefiting from stronger gross and operating margins, which led to a significant beat in non-GAAP (NG) EPS.
Despite a projected 7% quarter-over-quarter decline in revenue for the first quarter of Fiscal Year 2025 (FQ1™25), Plexus provided a solid EPS forecast, supported by continued healthy margins. The company's impressive free cash flow (FCF) in the fourth quarter was highlighted as a key factor in the stock's performance and as indicative of the strong cash generation capabilities of the business.
Needham's analyst noted that management's commentary about achieving mid-single-digit growth in F25 seems reasonable, with expectations of greater than 6% non-GAAP operating margins by the end of the fiscal year.
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