Despite recent downgrades to its stock, electronics manufacturing services firm Plexus ( PLXS) has continued to defy Wall Street, swimming upward and bobbing at its 52-week high.

After Plexus' first-quarter earnings report in January beat consensus expectations, the stock charged up more than $7 in a day to $30.79. That climb has continued, despite analysts' caution about growing competition, a possible slowdown for Plexus' largest customer, Juniper Networks ( JNPR), and superficially high valuation.

But investors aren't listening. The stock ran up more than 2% on Monday to $36.63 to set another 52-week high.

"The run-up here is a bit excessive," says Richard Stice, an analyst for Standard & Poor's, who downgraded the stock from hold to sell on Thursday. "There seems to be a disconnect that's developed in terms of some of these metrics. I think it's due for a pullback at this point."

"The recent run subsequent to their last earnings report is not based on any news flow," he added.

Stice believes his downgrade was warranted because the company is trading above its peer group average on a variety of measures, including price-to-earnings and price-to-sales. The stock has now surpassed Stice's 12-month target price of $30. Standard and Poor's does not have a financial relationship with Plexus.

What's more, Plexus' stock is now up over 50% this year, Stice says, a growth percentage way above any of the other primary players in the sector, like Benchmark Electronics ( BHE) Celestica ( CLS), Flextronics ( FLEX), Jabil Circuit ( JBL), Sanmina-SCI ( SANM) and Solectron ( SLR).

"I think it is a bit rich at this point," agrees Carter Shoop, an analyst with Deutsche Bank Securities, who reiterated a sell rating for the stock in a Jan. 26 note. He has a price target of $22 on the stock. Neither Shoop nor his firm owns shares of Plexus.

And beyond outstretching its peer group, Shoop says the company is well above its historical ranges: It's trading at 31 times 2006 earnings per share using a normalized tax rate, and it's trading at 24 times its trailing enterprise value to EBITDA (the normal range is five to 15 times its trailing enterprise value to EBITDA).

"I think there are a lot of headwinds that exist for the company," Shoop says, noting concern about Plexus' reliance on Juniper.

Shoop recently suggested in a note that investors should look for Juniper sales to decline in the March quarter and to trend flat in the second half of 2006, while Baird analyst Reik Read lowered his rating on Juniper in January, citing a cautious outlook on Asia revenue. Read doesn't own shares of Plexus.

Further, Shoop wrote that there was a greater than 50% possibility that Juniper's Netscreen division might move to a lower-cost manufacturer in fiscal 2006, mentioning Flextronics as a company that might pick up some share.

Stice says that as more of the larger EMS companies expand operations into the medical sector, Plexus may lose some of its share in that market as well. That's a key sector for Plexus, where it garners 30% of its revenue.

But one institutional investor remains bullish on the company's prospects.

"They're tanned and fit and ready to go," says Scott Link, a portfolio manager with Minneapolis-based Disciplined Growth Investors, which has held shares of Plexus for a number of years. Link says the company is in the "early innings" of recovery after the downturn in telecom and networking-related EMS since the dot-com bust.

During that time, Plexus was able to build up its business by expanding into Mexico, the U.K. and Malaysia, and that's helped them from a competitive standpoint, Link says.

" They've always done a great job of differentiating themselves. They don't want to be all things to all people. I think of them as a higher-end, higher-margin, higher-return-on-capital player in the EMS space," Link says.

"A big part of their business model is the engineering services they provide. A customer can come to them with an idea, and their engineers can take that idea and help develop the product," he says.

The company has a great blue-chip customer list and a strong legacy in the medical field, he says. And he's not sweating any loss of business to Juniper, either. "Plexus has a large backlog of business outside of Juniper, so if their exposure to Juniper were to go down, I think they'd be able to make it up in other areas with other customers," Link says.