The provider of worldwide electronic manufacturing services and solutions could present risks regarding customer concentration and valuation, analysts said.
"We continue to see upside to analysts' EPS, but this is offset by customer concentration and valuation," analysts said, adding, "To the extent that additional EPS upside is driven by Apple (AAPL) , we believe that the increasing exposure to this large customer could weigh on the multiple and partly offset upward revisions."
Shares of Jabil closed up 1.18% at $21.35 yesterday.
Separately, TheStreet Ratings team rates JABIL CIRCUIT INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate JABIL CIRCUIT INC (JBL) a HOLD. The primary factors that have impacted our rating are mixed --some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JBL, with its decline in revenue, underperformed when compared the industry average of 3.7%. Since the same quarter one year prior, revenues fell by 10.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- In its most recent trading session, JBL has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- JABIL CIRCUIT INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, JABIL CIRCUIT INC swung to a loss, reporting -$0.03 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus -$0.03).
- Net operating cash flow has significantly decreased to $89.47 million or 77.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 120.6% when compared to the same quarter one year ago, falling from $127.02 million to -$26.20 million.
- You can view the full analysis from the report here: JBL Ratings Report