Hello,

Welcome to our flagship newsletter, MarketBeat Daily Ratings.

We'll deliver the latest "Buy" and "Sell" ratings from Wall Street's top-rated analysts directly to your inbox each morning.

But first, we need you to do two quick things:

1. Hit reply, and send a simple "Yes." Just one word. This tells Google (and other emails providers) that you actually want to get our newsletter.

2. After that, this link to confirm your subscription. That will tell us that you received our welcome email and that we should start sending your daily report. 

Confirm your subscription here.

After you have completed these two steps, we would like to gift you a free copy of one of our most popular investing reports: 7 Stocks to Buy and Hold Forever. You can download the report with this link.

Thank you again for subscribing. We look forward to being an important part of your investing journey

Matthew Paulson
Founder and CEO, MarketBeat.

P.S. If you didn’t intend to subscribe, no problem—you can unsubscribe with this link.

(ARReply-161)

Plexus Is Booming—But Can the Growth Story Last?

Written by Peter Frank. Posted: 10/3/2026.

For most of its history, Plexus (NASDAQ: PLXS) was the kind of company investors overlooked.

The company, based in Neenah, Wisconsin, builds complex electronics for other companies’ products, from surgical robots and defense radios to the machines used to manufacture semiconductors. Its history has been steady, profitable and a little dull.

Major Buy Alert Issued for October 31st (Ad)

Keith Kaplan has invested $17 million into his own AI research tools, building a platform now used by 180,000 people worldwide.

His system has flagged a handful of stocks worth watching ahead of October 31st.

See which stocks his AI research platform is flagging right now.

See which stocks his AI research platform is flagging now

Not anymore. Plexus has become a genuine growth story, winning new programs in defense, data-center power and semiconductor equipment, and its stock has been rewarded accordingly. Analysts rate it a Buy.

The question for investors, though, is whether this is a durable trend or a cyclical boom that is already priced in.

Quarterly Results Show Accelerating Growth

So far, the boom is winning. Plexus’ fiscal third-quarter report on July 29 was a record. Revenue jumped 28.2% from a year earlier to $1.305 billion, exceeding analysts’ expectations and rising 12% from the prior quarter.

Adjusted earnings per share came in at $2.32, beating Wall Street’s $2.13 estimate. On a standard accounting basis, earnings were $1.58 per share, but that figure included a one-time stock-compensation charge of 74 cents per share tied to executive retirements.

All 3 Markets Showed Growth

All three of its markets posted growth. Industrial, which includes semiconductor equipment, led the way with a 45% increase in revenue and now accounts for nearly half of sales. Sales in aerospace/defense and healthcare/life sciences also grew. Although margins were thin, as is normal for contract manufacturers, they improved from a year ago.

The outlook is also strong. Plexus expects fiscal fourth-quarter revenue of $1.33 billion to $1.38 billion and now expects more than 20% revenue growth for fiscal 2026, a sharp turnaround from fiscal 2025, when revenue was essentially flat.

New Business Drives the Growth Outlook

The bull case rests on new business. Plexus won dozens of new manufacturing programs last quarter, the company reported. Those wins included a program to build battery energy-storage systems for data centers, as well as a sizable batch of aerospace and defense programs, including a naval submarine electronics contract.

In fact, its pipeline of potential deals reached a record $4.5 billion, and management says fiscal 2027 revenue growth should exceed its long-term goal of between 9% and 12%. Growth is expected to be led by defense, space, drones and semiconductor equipment.

Analysts Remain Bullish on Plexus

Wall Street likes what it sees. Nearly every analyst covering the stock rates it a Buy. Of the eight analysts following Plexus, one gives the company a Strong Buy rating, six rate it a Buy and one has a Hold rating.

Even after a runup of roughly 83% this year, the average price target remains slightly above the current share price of about $266. With a current target of $276.86, that implies approximately 3% upside. The highest target price is $330, while the lowest is $195 per share.

The board is also backing the story. In late August, directors approved a new $100 million share-buyback program that begins once the current program runs out.

A Rich Valuation Raises the Risk

Given its recent numbers and rich pipeline, the most important risk at this point appears to be valuation. Plexus trades at a forward price-to-earnings ratio of about 38, above those of larger rivals, such as Jabil (NYSE: JBL), Sanmina (NASDAQ: SANM) and Celestica (NYSE: CLS).

That’s a sizable premium for a business that keeps only about 5 cents of operating profit from each dollar of sales. If growth slows, especially in the cyclical semiconductor equipment business, the stock could fall sharply.

There are other yellow flags. Rapid growth led to slightly negative free cash flow last quarter as Plexus invested in inventory and equipment. Its largest customers account for a growing share of revenue, so losing one major program would hurt. Healthcare growth is also expected to cool.

Strong Momentum Faces Its Next Test

These risks, however, have yet to materialize. Plexus is winning share in defense, data-center power and semiconductor equipment. Its pipeline is at a record, and management expects above-target growth to continue into fiscal 2027.

That is a very different company from the sleepy contract manufacturer investors once overlooked.

What investors should keep in mind, though, is that after such a strong run, the stock leaves little room for error. The next test comes with fiscal fourth-quarter results and a first look at fiscal 2027 in late October.

For investors interested in companies tied to defense spending and the AI infrastructure boom, Plexus is worth a closer look.