FLEX LTD.

Large EMS provider with thin (structural) margins but strong returns, $1B+ free cash flow, and steady growth.

Strengths

• Strong returns and FCF — ROE 17.1% (75th), FCF $1.05B (84th)
• Steady growth — revenue +8.1%, net income +5.0%
• Diversified end-markets and supply-chain services — qualitative (per 10-K)

Risks

• Thin margins — gross margin 9.2%, net margin 3.2% — structural to EMS
• Customer-demand/forecasting risk per risk factors — qualitative (per 10-K)
• Moderate leverage and thin quick liquidity — D/E 0.73, quick ratio 0.87

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Customer concentration~45% of revenue from one customer/distributor — No customer accounts for more than 10% of our annual revenue and the ten largest accounted for 45% of our net sales in fiscal year 2026
• Strong balance sheetStrong balance sheet — $2.4B cash & investments
• Buying back stockNet buyback — share count -4%/yr over 4y
• China exposureFor further information, refer to Item 1A, "Risk Factors - Tariffs, trade restrictions, export controls, and changes in trade policy, including heightened trade volatility and uncertainty regarding tr
• Insider sellingInsider selling — 137 open-market sale(s) by 8 insider(s) (cluster of 8 insiders, ~$112M, last 6mo) Form 4 ↗