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Plexus Corporation’s PLXS shares have faced a challenging start to 2025, down 16.8% year to date. This decrease is steeper than the Electronic Manufacturing Industry’s decline of 3.6%. Meanwhile, the S&P 500 composite and the broader Computer Technology Sector have registered losses of 3.3% and 8%, respectively.
Price Performance
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The decline is likely to make investors reassess their positions. Let us dive into PLXS’ pros and cons and determine the best course of action for your portfolio.
Why is PLXS Stock Declining?
Continued demand weakness in the industrial market sector remains concerning for Plexus in the near term. Revenues for the fiscal second quarter are forecasted to sequentially decline in high-single-digit to low-double-digit for the Industrial sector, owing to demand instability across several subsectors offsetting gains in the semiconductor capital equipment vertical. We expect quarterly revenues from Industrial sector to be down 4.3% year over year to $400.4 million.
Moreover, Plexus now expects more subdued growth for Aerospace/Defense sector in fiscal 2025 compared with earlier expectations, owing to near-term challenges within the commercial aerospace subsector. For fiscal 2025, we expect revenues from Aerospace/Defense sector to be up 2%.
Plexus also acknowledged the evolving geopolitical environment and the impact of global trade policies. Uncertainty in global trade policies and geopolitical tensions could disrupt the supply chain, increase costs and cause delays in production or shipment of key components, which could ultimately impact PLXS’ revenues and margins.
Given these factors, analysts seem bearish about the stock, which is evident from the downward revision in earnings estimates. In the past 60 days, analysts have decreased their earnings estimates for the current quarter by 0.7% to $1.54.
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It is trading below its 50-day moving average, indicating bearish sentiment among investors. The stock closed at $130.24 in the last trading session, down 24.7% from its 52-week high of $172.89.
PLXS’ Long-Term Outlook
A healthy number of program wins will drive the top-line performance. In the fiscal first quarter, Plexus won 30 manufacturing programs, representing $212 million in annualized revenues once fully ramped into production. It ended the fiscal first quarter with manufacturing program wins, including $130 million from the Healthcare/Life Sciences sector.
The funnel of qualified manufacturing opportunities is pegged at $3.6 billion, indicating a strong pipeline for growth. Plexus expects new program ramps across all three segments to aid fiscal 2025 revenue growth.