Flex currently trades at $65 and has been a dream stock for shareholders. It’s returned 263% since March 2021, more than tripling the S&P 500’s 79.9% gain. The company has also beaten the index over the past six months as its stock price is up 21.1% thanks to its solid quarterly results.

Is there a buying opportunity in Flex, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

We’re happy investors have made money, but we don't have much confidence in Flex. Here are three reasons you should be careful with FLEX and a stock we'd rather own.

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Flex’s sales grew at a sluggish 2.8% compounded annual growth rate over the last five years. This was below our standards.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Flex has shown weak cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 2.8%, subpar for a business services business.

We like to invest in businesses with high returns, but the trend in a company’s ROIC can also be an early indicator of future business quality.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Flex’s ROIC averaged 4.3 percentage point decreases each year over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

Flex isn’t a terrible business, but it doesn’t pass our quality test. With its shares outperforming the market lately, the stock trades at 17.9× forward P/E (or $65 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now. Let us point you toward one of our all-time favorite software stocks.

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.