Flex Ltd
FLEX
recently expanded its 15-year partnership with microinverter supplier
Enphase Energy, Inc
.
ENPH
for boosting the latter’s global manufacturing capacity. Per the agreement, beginning the first quarter of 2023, Flex’s new manufacturing site in Timisoara, Romania, will commence manufacturing Enphase microinverters for the European market.
Enphase is a global energy technology company that delivers energy management technology for the solar industry. It designs, develops, manufactures and sells home energy solutions, which connect energy generation, energy storage and control and communications management on one intelligent platform. The company transformed the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Microinverters remain this California-based company’s legacy product. Enphase has shipped more than 42 million microinverters and approximately 1.9 million Enphase-based systems have been deployed in more than 130 countries.
Flex’s manufacturing factory in Romania will enable Enphase to augment its global capacity and improve the delivery timeline for its customers in Europe. This will help address the region’s rapid growth and demand for residential solar on account of surging energy prices and the increased transition to electric vehicles (EV) and heat pump technology. This deal will provide more clean energy technology like solar and batteries across Europe, thereby providing greater energy security for consumers as the dependence on fossil fuels continues to decline.
Amid the heightening climate change concerns, countries are setting ambitious new targets to help accelerate the transition to a more electrified future. Amid this scenario, the latest agreement will prove a revolutionary deal for providing clean energy in Europe and across the globe. Enphase is highly optimistic about this expanded manufacturing agreement, which will help meet the soaring demand for green energy with its leading solar, battery, and EV charging solutions.
For Flex, this augmented relationship with Enphase underscores their mutual commitment to providing superior quality and reliable microinverter-based systems to address Europe’s solar industry needs. The new factory’s initial production and planned capacity are still under the wraps.
Prospects Bright for FLEX
Singapore-based Flex is a provider of “Sketch-to-Scale” services to original equipment manufacturers (OEMs). The company provides end-to-end services i.e. designing, engineering, manufacturing, as well as supply-chain services & solutions.
The company benefits from strength across the Agility Solutions and Reliability Solutions segments along with a solid end-market focus on the back of emerging opportunities.
Flex’s diversified portfolio with an increased focus on end-markets like 5G, converged enterprise and cloud bodes well. The company is also likely to gain from robust momentum seen in Artificial Intelligence (AI), augmented & virtual reality (AR/VR), Industrial automation, autonomous/connected cars and other upcoming technologies.
Moreover, based on its growing intellectual property (IP) portfolio, the company is well-positioned to address the need of customers who are looking to leverage the proliferation of advanced technologies.
Driven by strong demand across its segments, the company recently reaffirmed its fourth quarter and fiscal 2022 guidance at its virtual investor day, which bodes well for the future. For the fiscal fourth quarter, Flex continues to expect revenues between $6.2 billion and $6.6 billion. Adjusted earnings are expected in the 41-46 cents per share band, while GAAP earnings per share (EPS) are estimated in the range of 32-37 cents.
For fiscal 2022, Flex continues to expect revenues between $25.4 billion and $25.8 billion. This reflects 6% year-over-year growth at the midpoint. Adjusted earnings are expected in the $1.85-$1.90 per share band, while GAAP EPS is estimated in the range of $1.90-$1.95.
Shares of FLEX have declined 6.1% in the past year compared with the
industry
’s fall of 20.2%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Flex currently carries a Zacks Rank of 2 (Buy).
Other top-ranked from the broader technology space include
Bel Fuse
BELFB
and
Iridium Communications
IRDM
. While Bel Fuse flaunts a Zacks Rank of 1 (Strong Buy), Iridium carries a Zacks Rank #2.You can see
the complete list of today’s Zacks #1 Rank stocks here.
Bel Fuse has a projected earnings growth rate of 3.65% for 2023. The Zacks Consensus Estimate for Bel Fuse’s 2023 earnings has been unchanged in the past 30 days.
Bel Fuse’s first-quarter 2022 EPS is estimated at 22 cents,suggestingyear-over-year growth of 195.65%. Shares of BELFB have lost 17% in the past year.
Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.
Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have gained 3.1% in the past year.
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