Flex Ltd. (NASDAQ:FLEX), a leader in the printed circuit boards industry, has disclosed a recent transaction by its Chief Executive Officer, Revathi Advaithi. On June 12, 2024, Advaithi sold a total of 130,604 ordinary shares at a weighted average price range of $31.79 to $32.71, resulting in a total value of over $4.1 million.
The sale was conducted to cover tax withholding obligations related to the vesting of performance-based restricted share units (PSUs). These PSUs were awarded on June 9, 2021, with the final number of shares granted contingent upon the achievement of specific performance criteria over a three-year period. The performance goals were successfully met, and the PSUs vested on June 11, 2024, as certified by the issuer.
In addition to the sale, Advaithi was also awarded 164,216 unvested restricted share units (RSUs) on June 12, which will vest in three equal annual installments starting from June 12, 2025. These RSUs are part of a long-term incentive plan for the CEO and are designed to align her interests with those of the shareholders.
Following these transactions, Advaithi's total direct ownership in Flex Ltd. stands at 2,094,643 shares, which includes unvested RSUs that will vest on future dates, as detailed in the footnotes of the SEC filing.
Flex Ltd. has undergone significant changes in its corporate history, including name changes from Flextronics International Ltd. to its current designation. The company is incorporated in Singapore and operates globally, providing innovative design, engineering, manufacturing, and supply chain services and solutions.
Investors often monitor the buying and selling activities of company executives as these transactions can provide insights into their perspective on the company's current valuation and future prospects. While transactions like these are a regular part of executive compensation and financial planning, they are closely watched for the signals they may send to the market.
In other recent news, Flex has made significant strides, both in terms of acquisitions and financial performance. The global manufacturing partner announced the acquisition of FreeFlow, a specialist in asset disposition and digital circular economy tracking for secondary markets. This acquisition is aimed at enhancing Flex's product lifecycle services and promoting sustainability by enabling the sale of surplus and returned inventory through FreeFlow's B2B digital marketplace.
In terms of financial performance, Flex reported its Q4 and fiscal year 2024 results, revealing a resilient growth despite a dip in revenue. The company's Q4 revenue was $6.2 billion, a 12% year-over-year decrease, and the full-year revenue was $26.4 billion, a 7% drop. However, profitability metrics such as gross profit, operating income, and earnings per share (EPS) showed an increase. The gross profit for the quarter improved to $532 million, and for the year, it reached $2.1 billion. Operating income rose by 3% to $1.3 billion, and EPS saw an 11% increase to $2.15.
These recent developments come in the wake of Flex's strategic focus on digitization, regionalization, and sustainability. The company's outlook for fiscal 2025 includes a prediction of flat to 3% decline in revenue, with adjusted operating margins between 5.2% and 5.4%, and an adjusted EPS between $2.30 and $2.50. The company's CEO, Revathi Advaithi, discussed the Flex Forward strategy, aiming for mid-single-digit revenue growth and 20% EPS growth. Flex anticipates continued growth in the cloud business by around 20% per year for the next few years.
InvestingPro Insights
As Flex Ltd. (NASDAQ:FLEX) navigates through the dynamics of the printed circuit boards industry, recent activities by its CEO have caught the attention of investors. Complementing this narrative, a glance at the real-time data and analytics from InvestingPro offers additional insights into the company's financial health and market position.
The company's market capitalization stands at a robust $12.85 billion, reflecting its significant presence in the industry. Furthermore, Flex Ltd. is currently trading at a P/E ratio of 13.84, which is considered low relative to its near-term earnings growth potential. This metric is particularly relevant as it suggests that the company's earnings are potentially undervalued, providing an attractive entry point for investors considering the stock's growth prospects.
InvestingPro Tips highlight that Flex Ltd. has been a strong performer with a high return over the last year, indicating a positive market sentiment and investor confidence. Additionally, the company is seen as a prominent player in the Electronic Equipment, Instruments & Components industry. Despite a decrease in revenue growth of -7.32% in the last twelve months as of Q4 2024, the company's gross profit margins remain at 7.65%, underscoring the challenges it faces in maintaining profitability.
For investors seeking further guidance, there are 6 additional InvestingPro Tips available for Flex Ltd., including insights on share buybacks, shareholder yield, and earnings revisions. By accessing InvestingPro, investors can gain a deeper understanding of these factors and how they may influence the company's future performance. Moreover, by using the coupon code PRONEWS24, users can obtain an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a cost-effective way to stay informed with premium financial analytics and insights.
Flex Ltd.'s next earnings date is set for July 25, 2024, a key event for investors to monitor as it will provide further clarity on the company's financial trajectory and operational performance. With the InvestingPro Fair Value estimated at $31.8 USD, closely aligned with the current market valuation, investors are equipped with a benchmark for assessing the stock's potential fair value.
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