Plexus Plunges 10.98% on Earnings Volatility: Is This a Buying Opportunity or a Cautionary Tale?

Summary
• Plexus (PLXS) slumps 10.98% to $119.14, marking its worst intraday drop in over a year.
• Earnings beat of $1.90 EPS (11.11% above estimates) contrasts with $1.018B revenue (0.98% below forecast).
• Intraday range of $116.18–$127.54 highlights extreme volatility post-earnings.
• RSI at 37.53 suggests oversold territory, but bearish momentum persists with MACD histogram turning negative.
• The stock now trades at 21.1x forward P/E, below its 52-week average of 24.5x, but faces near-term technical hurdles.

Today’s plunge in PLXS has rattled investors, with the stock collapsing over 10% despite an earnings beat. While management highlighted strong free cash flow and new program wins, the revenue miss and bearish technicals have sparked a selloff. Traders must weigh the fundamental resilience against deteriorating momentum indicators as key support levels come into focus.

Earnings Beat vs. Revenue Miss Sparks Investor Exodus
Plexus’ 10.98% intraday decline reflects a stark disconnect between earnings performance and market sentiment. While the company exceeded EPS estimates by 11.11% to $1.90, revenue fell short by 0.98% at $1.018B. Management attributed this to 'evolving program ramp timelines and tariff-related uncertainties,' yet investors reacted harshly. The stock’s after-hours drop of 8.78%—despite a strong free cash flow of $13.2M—suggests skepticism about the sustainability of operational gains. Analysts’ downward revisions to earnings estimates and the absence of a clear growth catalyst in Q4 have compounded concerns, with the stock now trading 13% below its 52-week high of $172.89.

Electronic Equipment Sector Mixed as FLEX Slides 5.3%
PLXS’ decline outpaced its sector peers, with the Electronic Equipment, Instruments & Components sector showing mixed performance. Sector leader FLEX (FLEX) fell 5.3%, reflecting broader manufacturing sector jitters. While PLXS’ engineering solutions segment delivered double the margin of its manufacturing peers, the market remains wary of its semi-cap exposure. The sector’s 30-day volatility (21.40% YTD) underscores structural challenges in capital-intensive manufacturing, where PLXS’ 21.1x PE ratio now appears relatively cheap but faces liquidity risks.

Bearish Momentum and Short-Dated Puts Signal Aggressive Hedging Opportunities
• 200-day MA: 140.36 (well above current price)
• RSI: 37.53 (oversold but bearish divergence)
• MACD: 0.427 (bullish), Signal: 0.866 (bearish), Histogram: -0.439 (bearish crossover)
• Bollinger Bands: 132.13–139.65 (current price at 116.18, 20% below lower band)

The technical picture is bearish, with PLXS testing key support at $130.81 (30D support) and $134.77 (200D support). A breakdown below $116.18 intraday low could trigger a 20% extension to $103.43 (52W low). Short-term options offer asymmetric risk/reward:

1. PLXS20250815C120 (Call, Strike: $120, Expiry: 8/15)
- IV: 12.98% (low, suggesting limited volatility)
- Delta: 0.452 (moderate directional bias)
- Theta: -0.1339 (high time decay)
- Gamma: 0.1020 (strong sensitivity to price moves)
- Turnover: 1,320 (liquid)
- Payoff at 5% downside: $9.14 (limited upside if price stabilizes)
- Why it stands out: High gamma and moderate delta make this call option responsive to a potential rebound above $120, though theta decay favors a quick decision.

2. PLXS20250919P115 (Put, Strike: $115, Expiry: 9/19)
- IV: 28.04% (reasonable volatility)
- Delta: -0.3320 (moderate bearish exposure)
- Theta: -0.0093 (low time decay)
- Gamma: 0.0273 (modest sensitivity)
- Turnover: 455 (liquid)
- Payoff at 5% downside: $4.89 (attractive if price breaks $116.18)
- Why it stands out: The put offers downside protection with low theta decay, ideal for a long-term bearish trade as PLXS tests key support levels.

Actionable Insight: Aggressive bears should buy PLXS20250919P115 for a 4.89x payoff if the stock breaks $116.18. Conservative traders may short PLXS20250815C120 if the stock stabilizes above $120.

Backtest Plexus Stock Performance
The backtest of PLXS's performance after an intraday plunge of -11% shows favorable short-to-medium-term gains. The 3-Day win rate is 57.80%, the 10-Day win rate is 58.51%, and the 30-Day win rate is 61.35%, indicating a higher probability of positive returns in the immediate aftermath of such a significant drop. The maximum return during the backtest period was 4.36%, which occurred on day 59, suggesting that while there is some volatility, there is also potential for recovery and even gains following a steep intraday decline.

PLXS at Pivotal Juncture: Break Support or Rebound for Recovery
The immediate focus for PLXS is whether it can hold the $116.18 intraday low or retest the $120 level for a potential rebound. A breakdown below $116.18 would validate the bearish case, targeting the 52-week low of $103.43. Conversely, a close above $127.54 (intraday high) could signal a short-covering rally. Sector leader FLEX’s 5.3% drop adds context, with manufacturing stocks facing broader macroeconomic headwinds. Action: Watch for a $116.18 breakdown or a $120 close above the 125.10 open for a directional trade. Investors should monitor the 8/15 options expiry for liquidity clues as the stock navigates a critical inflection point.