As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at electronic components & manufacturing stocks, starting with Coherent (NYSE: COHR).
The sector could see higher demand as the prevalence of advanced electronics increases in industries such as automotive, healthcare, aerospace, and computing. The high-performance components and contract manufacturing expertise required for autonomous vehicles and cloud computing datacenters, for instance, will benefit companies in the space. However, headwinds include geopolitical risks, particularly U.S.-China trade tensions that could disrupt component sourcing and production as the Trump administration takes an increasingly antagonizing stance on foreign relations. Additionally, stringent environmental regulations on e-waste and emissions could force the industry to pivot in potentially costly ways.
The 10 electronic components & manufacturing stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 1.9% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 23.3% since the latest earnings results.
Best Q4: Coherent (NYSE: COHR)
Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.
Coherent reported revenues of $1.43 billion, up 26.8% year on year. This print exceeded analysts’ expectations by 4.4%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates.
The stock is down 37.1% since reporting and currently trades at $56.61.
Is now the time to buy Coherent? Access our full analysis of the earnings results here, it’s free.
Flex (NASDAQ: FLEX)
Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ: FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers.
Flex reported revenues of $6.56 billion, up 2.1% year on year, outperforming analysts’ expectations by 5.7%. The business had a very strong quarter with a solid beat of analysts’ full-year EPS guidance estimates.
The stock is down 25.3% since reporting. It currently trades at $30.38.
Is now the time to buy Flex? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Knowles (NYSE: KN)
With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.
Knowles reported revenues of $142.5 million, down 33.8% year on year, falling short of analysts’ expectations by 2.4%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Knowles delivered the slowest revenue growth in the group. As expected, the stock is down 20.3% since the results and currently trades at $14.55.
Read our full analysis of Knowles’s results here.
Plexus (NASDAQ: PLXS)
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ: PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Plexus reported revenues of $976.1 million, flat year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ EPS estimates but a slight miss of analysts’ EPS guidance for next quarter estimates.
The stock is down 28.8% since reporting and currently trades at $121.53.
Read our full, actionable report on Plexus here, it’s free.
CTS (NYSE: CTS)
With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE: CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.
CTS reported revenues of $127.4 million, up 2.2% year on year. This number came in 4% below analysts' expectations. Overall, it was a disappointing quarter as it also produced full-year revenue guidance missing analysts’ expectations.
CTS had the weakest performance against analyst estimates among its peers. The stock is down 24.1% since reporting and currently trades at $37.32.
Read our full, actionable report on CTS here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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