$31.45
$74.24
bear $31.45
base $55.76
bull $74.24
margin of safety $30.00
market price* $230.47
Plexus is a contract manufacturer and product-development partner that builds complex, lower-volume electronics for customers in healthcare and life sciences (40% of fiscal 2025 sales), industrial (43%) and aerospace and defense (17%). Sales are booked where the product is made: Asia-Pacific $2.39 billion (59%, with plants including Penang, Malaysia and Haining and Xiamen, China), the Americas $1.22 billion (30%, including Guadalajara, Mexico and Buffalo Grove, Illinois) and Europe/Middle East/Africa $440 million (11%, down 18% in fiscal 2025). No customer was above 10% of sales in fiscal 2025 or 2024, but the ten largest were 49.1% in 2025, and the company states it generally has no firm long-term purchase commitments from customers. HOW WE MEASURE THE CASH. Reported operating cash flow swings with inventory and receivables: it was negative $26 million in fiscal 2022 and $437 million in fiscal 2024, almost entirely working-capital timing. We remove those swings, deduct stock compensation ($30 million in fiscal 2025) as a real cost, and deduct only the capital spending needed to stand still (about $94 million in fiscal 2025, above the $78 million of depreciation, so no acquired asset is quietly wasting away). On that basis, cash flow to shareholders after interest was $2.86, $3.43, $0.76, $2.23, $4.40, $4.76, $3.47, $3.12, $3.10 and $4.85 per share for fiscal 2016 through 2025. Because we value the whole business first and subtract what it owes afterward, we add back interest paid, giving $3.30, $3.83, $1.12, $2.74, $4.89, $5.25, $4.01, $4.28, $4.15 and $5.30. Each year reconciles to reported net income plus non-cash charges within about 1%. STARTING LEVEL. The median of fiscal 2020-2025, the years at roughly today's scale and including the 2022 component shortage and the 2024 inventory unwind, is $4.59 per share. We start the base case at $5.00. The step up reflects the first nine months of fiscal 2026: sales of $3.54 billion (up 19%) and operating income of $177.6 million (up 19%), even though the tax rate rose to 19% from 12% a year earlier. Our rebuild of those nine months implies a pace above $6 per share, but it is three quarters old, customers have not committed volumes, and third-quarter operating margin slipped to 4.7% from 5.3% as sales rose 28%, so we credit only $5.00. The tax rate matters: a Malaysian tax holiday (through 2034) saved $43.1 million ($1.56 per share) in fiscal 2025, and the company says a global minimum tax will materially erode it; the nine-month results already carry the higher rate. Growth check: cash flow before lenders actually grew 28% in fiscal 2025 ($4.15 to $5.30); year one of the base case is $5.00, below that, with no growth assumed until year two. BASE CASE: business worth $61.33 per share, net debt $5.57, shares worth $55.76. After the $5.00 start we credit 3% a year for four years and 2% for five, below the 5.2% a year at which sales grew from $2.56 billion (fiscal 2016) to $4.03 billion (fiscal 2025). That record is in hand: sales rose in six of nine years, including through a 6% drop in 2024, funded from the company's own cash, through hundreds of small program ramps (fiscal 2025 alone added $71 million in the Americas and $103 million in Asia-Pacific from new products for existing customers) rather than a few large bets. We charge that growth for the working capital it absorbs: over the decade each extra dollar of sales absorbed about 17 cents ($245 million on $1.48 billion of added sales), so growth years are lower, not higher, in cash terms. We left out share gains not yet won, margin expansion and any benefit from buybacks. After year ten the stream is held flat at about $6.21 through year twenty and nothing after; the first ten years alone support about $30 per share, so more than half of this value rests on the business continuing to renew its programs for a second decade, which is a judgement the ten-year record supports but cannot prove. BEAR CASE: business worth $37.02, net debt $5.57, shares worth $31.45. We model a repeat of the fiscal 2018-2019 episode, when cash flow before lenders fell from $3.83 to $1.12 and then $2.74 as margins collapsed during a large inventory and receivables build: $4.00 in year one, then $1.50, $2.00 and $2.80, followed by a permanent $3.50, which is the fiscal 2022-2024 average of $4.15 less about $0.65 for higher taxes. No working-capital release is credited. Even the $1.50 trough (about $41 million a year) covers fiscal 2025 interest of $12.3 million several times over. The bear case also contemplates the uncommitted receivable-sale programs ($214 million of sold receivables at fiscal 2025 year end) being withdrawn, which would lift borrowing costs modestly but not break the company. BULL CASE: business worth $79.81, net debt $5.57, shares worth $74.24. Cash flow before lenders starts at $6.00 (below the current nine-month pace), grows 5% a year for four years and 4% for five, again charged for working capital, then holds flat to year twenty. The lever is the same program-ramp engine continuing at its demonstrated pace with margins held. DEBT. At July 4, 2026 borrowings were about $222 million (the $50 million 4.22% notes due June 15, 2028 plus roughly $172 million drawn on the revolver), up from about $90 million at September 27, 2025 as inventories rose $260 million in nine months; operating cash flow was only $39 million for the nine months against $117 million a year earlier. Finance leases add $44 million. Cash is $314 million, of which we count $114 million as surplus, keeping about $200 million (roughly two weeks of costs) to run the business. Net debt is about $152 million, $5.57 per share. The $500 million revolver matures June 9, 2027 and must be refinanced; covenants are a leverage ratio and minimum interest coverage, which the company met at the last year-end. Debt is rated by cash flow no worse than 1.5 times a year of business cash flow at the base level, so we expect refinancing but charge a costlier one in the bear case. The 4.22% notes cost slightly less than market and no adjustment was made as the difference is immaterial. WHAT CHANGED. Our earlier version counted about $6 per share of net cash taken from the September 2025 balance sheet; the latest quarter shows net debt of about $5.57 per share because the sales surge consumed cash, a swing of roughly $11 per share. Higher sales and operating income and a higher tax rate also moved the picture. Earlier figures were built on a different basis and are not comparable. COULD NOT RECONCILE. Fiscal 2023 and 2024 sales appear lower in the latest annual report ($4,210 million and $3,961 million) than as first reported ($4,320 million and $4,078 million); we could not locate the reason, and cash flow figures are unaffected. We could see the fiscal 2026 interim numbers but not management's explanation of the sales jump. MARGIN-OF-SAFETY PRICE: $30. How sure are we of the earnings level? Moderately: cash flow before lenders has ranged from $1.12 to $5.30 per share in ten years, margins are thin (operating margin about 5%), and customers give no firm commitments. The worst plausible outcome is a customer loss or industry downturn compounded by stranded inventory, which no case fully prices; the balance sheet would survive it (modest borrowings, no dividend to protect), but earnings would not. If we are wrong on the three things most likely to be wrong: a $4.20 starting level gives about $46, no growth credit gives about $52, and crediting only the first ten years gives about $30. The price assumes a three-to-five-year holding period; the business pays no dividend, but it repurchased $65 million of stock in fiscal 2025 and $64 million in the first nine months of fiscal 2026. At $30 the first ten years of the base case alone cover the price, and the bear case implies roughly breaking even.