Plexus Plunges 17% Year to Date: Should You Sell or Hold the Stock?

Core Viewpoint - Plexus Corporation (PLXS) has experienced a significant decline in its stock price, down 16.8% year to date, which is notably worse than the Electronic Manufacturing Industry's decline of 3.6% and the S&P 500's loss of 3.3% [1][5]. Price Performance - The stock is currently trading below its 50-day moving average, indicating bearish sentiment among investors, with a recent closing price of $130.24, down 24.7% from its 52-week high of $172.89 [9]. Reasons for Decline - Continued demand weakness in the industrial market sector is a major concern, with revenues for the fiscal second quarter expected to decline by 4.3% year over year to $400.4 million [5]. - The Aerospace/Defense sector is also expected to see subdued growth in fiscal 2025, with revenues projected to increase by only 2% due to challenges in the commercial aerospace subsector [6]. - Geopolitical tensions and uncertainty in global trade policies may disrupt supply chains, increase costs, and delay production, negatively impacting revenues and margins [7]. - Analysts have revised earnings estimates downward, with a 0.7% decrease for the current quarter to $1.54 [8]. Long-Term Outlook - Plexus has secured 30 manufacturing programs in the fiscal first quarter, which could generate $212 million in annualized revenues once fully ramped up, including $130 million from the Healthcare/Life Sciences sector [10]. - The company has a strong pipeline of qualified manufacturing opportunities valued at $3.6 billion, which is expected to support revenue growth in fiscal 2025 [11]. - Plexus generated $27 million in free cash flow in the last reported quarter, exceeding expectations, and now anticipates generating $100 million in free cash flow for fiscal 2025 [12]. Investment Considerations - Despite a positive long-term outlook, the near-term expectations are uncertain due to bearish technical indicators and cautious management outlook for 2025, leading to a Zacks Rank 4 (Sell) [13]. - Other stocks in the same industry with better rankings include Celestica Inc (CLS), Jabil Inc. (JBL), and Sanmina Corporation (SANM), each carrying a Zacks Rank 2 (Buy) [14].