Is Jabil Still a Buy After a 451.4% Five-Year Surge?

Jabil Inc. (JBL) has long been a darling of the electronics manufacturing services (EMS) sector, delivering a staggering 451.4% return for investors over the past five years. But with the stock trading near $207 as of November 26, 2025, the question looms: Is Jabil still a buy, or has its valuation outpaced its fundamentals? This analysis examines the company's recent financial performance, valuation metrics, and strategic repositioning to determine whether the stock remains a compelling opportunity or has become overextended.

Financial Performance: AI-Driven Growth and Margin Expansion

Jabil's FY2025 results underscore its strategic pivot toward high-growth sectors. For the full fiscal year, the company reported net revenue of $29.8 billion, a 3.2% increase from FY2024, with core operating income rising to $1.62 billion and core diluted EPS climbing to $9.75. The standout performer was the Intelligent Infrastructure segment, which accounted for 45% of total revenue and surged 62% year-over-year, driven by demand for AI data center infrastructure and networking equipment.

Looking ahead, Jabil's FY2026 guidance is ambitious: $31.3 billion in revenue, a 5.6% core operating margin, and $11.00 in core EPS according to company projections. CEO Mike Dastoor has emphasized the company's focus on "high-margin, high-growth verticals," including healthcare and advanced automation, positioning Jabil to capitalize on long-term tailwinds in AI and industrial digitization.

Valuation Realism: DCF Analysis and P/E Comparisons

Jabil's valuation appears to straddle the line between realism and optimism. A DCF analysis suggests the stock may be trading at a 49% discount to intrinsic value, with a fair value estimate of $265 per share compared to its current price of $207. This implies the market is underestimating Jabil's ability to sustain its growth trajectory. However, a competing analysis from GuruFocus argues the stock is overvalued, with a current price of $116.50 (as of an unspecified date) exceeding its estimated fair value of $77.11. The discrepancy highlights diverging assumptions about future cash flow growth and discount rates.

Jabil's price-to-earnings (P/E) ratios further complicate the picture. The trailing P/E of 36.16 is elevated, but the forward P/E of 19.30 is significantly lower, reflecting optimism about FY2026 earnings. The EMS sector's average forward P/E is 22.44 as of October 2025 according to market data, suggesting Jabil is currently undervalued relative to its peers. However, this metric could narrow if the company fails to meet its ambitious guidance.

Strategic Repositioning and Risk Factors

Jabil's geographic rebalancing and focus on AI-driven infrastructure are critical to its long-term prospects. The company has shifted manufacturing closer to key markets, reducing lead times and supply chain risks while capturing higher-margin work. For instance, its Intelligent Infrastructure segment now contributes nearly half of revenue, with a projected 25% growth in AI-related revenue for FY2026.

Yet risks persist. The EMS sector is capital-intensive and cyclical, with margins vulnerable to macroeconomic shifts. Jabil's WACC of 10.96% and ROIC of 15.66% indicate value creation, but rising interest rates could pressure its leverage-heavy business model. Additionally, investor sentiment has been volatile: Despite beating Q4 earnings and revenue expectations, the stock fell 7.39% in pre-market trading, reflecting caution about broader market conditions.

Investor Sentiment and Entry Considerations

The past quarter has seen mixed signals. Jabil's stock gained 11% after exceeding Q3 expectations and revising its FY2025 outlook, but recent pullbacks suggest skepticism about its ability to sustain momentum. For risk-adjusted returns, investors must weigh Jabil's strong cash flow generation of $1.32 billion in adjusted free cash flow for FY2025 against potential headwinds like supply chain bottlenecks and slowing AI adoption.

Conclusion: A Buy with Caution

Jabil's strategic alignment with AI and its robust financial performance justify a bullish outlook. The DCF analysis and sector P/E comparisons suggest the stock is undervalued, particularly if the company meets its FY2026 guidance. However, the recent volatility and macroeconomic risks necessitate caution. For investors with a medium-term horizon and a tolerance for sector-specific risks, Jabil remains a compelling buy-but only at current levels if the company continues to execute its high-margin growth strategy.