What Should Investors Do With Flex Stock Ahead of Q1 Earnings?

Flex Ltd. FLEX is slated to report first-quarter fiscal 2027 results on Wednesday, before market open.

The Zacks Consensus Estimate for fiscal first-quarter revenues is $7.58 billion, which indicates an increase of 15.3% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 93 cents per share, up 29.2% year over year.

For the quarter, the company expects net revenues to be between $1.750 billion and $1.900 billion. Management expects adjusted earnings of $2.05 to $2.15 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 9.47%, on average. 

In the past year, the stock has surged 134.7% compared with the Zacks Electronics - Miscellaneous Products industry’s growth of 68.4%.

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FLEX has also outperformed its peers, Cisco Systems, Inc. CSCO, Jabil Inc. JBL and Sanmina Corporation SANM. CSCO, JBL and SANM have climbed 71.6%, 39.2% and 111.9%, respectively, in the same time frame.

What Our Model Says for Flex

Our proven model does not predict 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 not the case here.

FLEX has an Earnings ESP of -1.29% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping FLEX’s Q1 Earnings

Flex continues to benefit from robust demand for AI infrastructure, with its Cloud and Power Infrastructure (CPI) business emerging as the primary growth driver. On the last earnings call, management highlighted that the company recently secured substantial incremental business from several hyperscaler and data center customers, including Google. These engagements span power infrastructure, thermal systems and complex hardware manufacturing deployed across Flex's global footprint.

To strengthen its capabilities, the company completed the acquisition of Electrical Power Products (EP²), expanding its power portfolio with utility-grade solutions that enhance its ability to deliver end-to-end offerings for grid modernization, electrification and AI-driven data center infrastructure. Management also announced plans to spin off the CPI business into a standalone public company in the first quarter of calendar 2027, reflecting confidence in the business' scale, growth profile and strategic importance. Flex expects this momentum to continue in fiscal 2027, targeting 65-75% revenue growth for the CPI segment, followed by more than 80% growth in fiscal 2028.

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On the last earnings call, the company stated that AI-driven compute density is increasing demand for integrated power and thermal solutions, while recent multiyear program wins across hyperscalers, colocation providers, neoclouds and utility customers support its long-term outlook. Management expects the power business to continue outpacing cloud growth, with investments made in fiscal 2026 enabling stronger growth in the second half of fiscal 2027 and supporting capacity requirements through fiscal 2029.

Expanding its AI infrastructure solutions, Flex, through its advanced cooling subsidiary JetCool, introduced a turnkey liquid-cooled version of the Dell PowerEdge XE7745 server on June 25, 2026, to support faster enterprise AI deployments. The integrated solution combines direct-to-chip liquid cooling, rack-level infrastructure, deployment and maintenance services, and unified warranty coverage, enabling higher compute density, improved thermal performance, lower power consumption and simplified deployment through a single end-to-end offering.

Flex is also strengthening its position in the market by expanding its manufacturing partnership with Cerebras Systems. Announced on July 9, 2026, the collaboration aims to increase production of the Cerebras CS-3 AI accelerator systems nearly sevenfold by 2026, positioning Flex to capitalize on rising demand for advanced AI computing infrastructure. To support this expansion, the company is investing in new production lines, automated testing and validation facilities, as well as enhanced logistics capacity at its Milpitas, CA, facility.

Flex Ltd. Price and Consensus

Flex Ltd. price-consensus-chart | Flex Ltd. Quote

The company expects its Regulated Manufacturing Solutions (RMS) business to deliver high single-digit to low double-digit revenue growth in the first quarter of fiscal 2027, driven by industrial and healthcare demand. Integrated Technology Solutions (ITS) revenue is also projected to increase in the high single-digit to low double-digit range, supported by strength in communications despite continued weakness in lifestyle.

However, the company is grappling with continued weakness in its lifestyle business, which is expected to partially offset strength in communications within the ITS segment. High debt and stiff competition remain additional concerns.

Key Valuation for FLEX

Flex has a Value Style Score of A. In terms of Price/Book, FLEX shares are trading at 8.44X, lower than the Electronics - Miscellaneous Products industry’s 26.35X.

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CSCO, JBL and SANM shares are trading at multiples of 9.21X, 24.68X and 4.28X, respectively.

Strategic View: Bet, Hold, or Offload FLEX Stock Pre-Q1?

Flex remains well-positioned ahead of its first-quarter fiscal 2027 earnings, supported by strong AI infrastructure demand, hyperscaler wins, the EP² acquisition and expanding liquid-cooling and AI manufacturing capabilities.

While weakness in the lifestyle business, high debt and competition remain risks, the company's robust CPI growth outlook and reasonable valuation continue to support its long-term outlook.

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This article originally published on Zacks Investment Research (zacks.com).

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