Flex Ltd. FLEX is slated to report fourth-quarter fiscal 2026 results on May 6, before market opens.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $6.92 billion, which indicates an increase of 8.1% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 86 cents per share, up 17.8% year over year.
For the quarter, Flex expects revenues to be between $6.75 billion and $7.05 billion. Management expects adjusted earnings of 83-89 cents per share.
The company’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 8.9%, on average.
In the past year, the stock has surged 150.2% compared with the Zacks Electronics - Miscellaneous Products industry’s growth of 81.1%.
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Factors to Note for FLEX’s Q4 Results
Flex has been gaining from strong momentum, underpinned by accelerating data center demand, improving margins and disciplined execution across its diversified portfolio.
The company’s data center business has emerged as its most powerful growth engine. On the last earnings call, Flex reported continued strong growth in its data center business, driven by rapidly expanding compute and AI workloads. The company stated that the market requires an ecosystem of integrated products, capabilities, technologies and services, and highlighted its holistic approach to enabling customers to build at the scale, speed and quality required in the AI era.
Flex announced the development of modular data center systems with NVIDIA to reimagine deployment for speed and scale, and a partnership with LG to advance thermal management solutions for gigawatt-scale data centers. It also deployed its advanced rack-level, vertically integrated liquid cooling solution at the Equinix Co-Innovation facility. Flex remains on track to generate approximately $6.5 billion in revenue from data centers, implying year-over-year growth of at least 35% and accounting for 25% of its total revenues.
Also, data center-related end markets continued to drive strong growth within the Agility segment. Agility Solutions’ revenues are expected to rise in the low to mid-single-digit range, with growth in cloud and networking partially offset by softer demand in consumer devices and lifestyle markets. Flex expects Reliability Solutions revenues to increase in the low double-digit to mid-teens range, supported by strong power demand and accelerating growth in Core Industrial and Health Solutions.
Flex Ltd. Price and EPS Surprise
Flex Ltd. price-eps-surprise | Flex Ltd. Quote
Margin improvement is likely to have been driven by a favorable mix and continued operational execution. Adjusted operating income is projected to be between $445 million and $475 million for the fiscal fourth quarter.
However, the company is grappling with continued weakness in consumer-related end markets, which remains a key factor affecting the Agility segment’s performance. While data center-related infrastructure, such as networking, continues to perform well, it does not fully offset the softness seen in consumer-driven businesses, resulting in moderate growth for Agility. High debt and stiff competition remain concerns.
Recent Developments
On April 22, Flex and Teradyne Robotics expanded their collaboration to advance intelligent automation across global manufacturing. As part of the strengthened partnership, Flex will both implement Teradyne Robotics’ automation solutions across its own manufacturing facilities and produce key robotics components to support scalable automation deployments for Teradyne Robotics’ customers worldwide.
On March 30, Flex entered into a definitive agreement to acquire Electrical Power Products, a leading provider of engineered-to-order electrical power control and protection systems, in an all-cash transaction valued at approximately $1.1 billion. The deal also includes anticipated tax benefits of around $0.1 billion, bringing the net value to roughly $1.0 billion. The acquisition is expected to be accretive to adjusted earnings per share in the first full fiscal year after closing.
On March 17, Flex announced new reference designs for NVIDIA Omniverse DSX Blueprint aimed at accelerating the deployment of large-scale AI factories. Developed under Flex’s AI Infrastructure Platform, the prefabricated modular solutions integrate power systems, high-density IT racks and advanced cooling into factory-built units designed for faster deployment, scalability and optimized performance.
On March 11, Flex announced that its subsidiary JetCool has partnered with Broadcom to develop liquid cooling solutions for next-generation AI XPUs. The collaboration introduces a single-phase direct-to-chip cooling system designed to integrate with Broadcom’s mechanical and thermal reference architecture.
On March 2, Flex announced an expanded collaboration with Advanced Micro Devices, Inc. AMD to manufacture the AMD Instinct platform in the United States. Production of the AMD Instinct MI355X platform has begun at Flex’s Austin, TX headquarters, with volume ramp expected next quarter. Flex is assembling the complete platform, integrating eight AMD Instinct GPUs along with PCIe Gen 5 interfaces, high-bandwidth memory and high-speed interconnects into a high-density system.
What Our Model Says for Flex
Our proven model predicts an earnings beat for FLEX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here.
FLEX has an Earnings ESP of +0.93% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other stocks you may want to consider, as our model shows that these too have the right elements to post an earnings beat in this reporting cycle.
Lumen Technologies, Inc. LUMN currently has an Earnings ESP of +27.27% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lumen is scheduled to report quarterly earnings on May 5. The Zacks Consensus Estimate for LUMN’s to-be-reported quarter’s earnings and revenues is pegged at a loss of 6 cents per share and $2.84 billion, respectively. Shares of LUMN have skyrocketed 120.4% in the past year.
Onto Innovation Inc. ONTO has an Earnings ESP of +1.63% and a Zacks Rank #1 at present. ONTO is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for ONTO’s to-be-reported quarter’s earnings and revenues is pegged at $1.38 per share and $289.1 million, respectively. Shares of ONTO are up 135.4% in the past year.
AMD has an Earnings ESP of +5.02% and a Zacks Rank #2 at present. AMD is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.30 per share and $9.84 billion, respectively. Shares of AMD are up 258.4% in the past year.
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