Shares of Jabil Inc. JBL have gained 32.5% in the past six months, driven by healthy demand trends in various end markets, a flexible business model and solid cash flow. Earnings estimate for JBL has improved to $8.76 per share from $8.68 per share for 2025 over the past 30 days The projections imply robust growth potential. Backed by strong fundamentals, this Zacks Rank #3 (Hold) stock appears primed for further appreciation.

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Healthy Demand & Portfolio Strength

Jabil’s top-line is benefiting from strength in cloud & data center infrastructure, capital equipment, healthcare, packaging end markets. Its large-scale portfolio of business sectors offers Jabil a high degree of resiliency during times of macroeconomic and geopolitical disruption. Management’s focus on integrating sophisticated AI and ML capabilities to enhance the efficiency of its internal processes is a major tailwind.

Jabil has an established global presence and a worldwide connected factory network which enables it to scale up production as per the evolving market dynamics. In September 2024, Jabil announced a significant expansion of the production capabilities of its silicon photonics-based products in Ottawa, Canada, to support the escalating demands from hyperscalers and cloud and AI data centers.

Strong Focus on Innovation & Strategic Acquisition

Strong emphasis on innovation is a major growth driver. In 2024, Jabil introduced J421E-S and J422-S servers powered by AMD 5th Generation EPYC and Intel Xeon 6 processors, respectively. The new servers offer top-notch scalability and efficiency, optimized for AI, fintech and cloud applications. In collaboration with Cyferd Inc., a pioneer in AI and data technologies Jabil launched a joint venture called ID8 Global. The partnership aims to provide a cutting-edge, generative AI-driven software platform capable of autonomously transforming supply chain and procurement management globally. 

In October 2024, the company closed the acquisition of Mikros Technologies LLC, a leading manufacturer of liquid cooling solutions, for an undisclosed amount. With this strategic move, JBL aims to expand its portfolio and match the growing demand for effective thermal management systems across a wide range of applications.

Growth in Free Cash Flow

The company reported a free cash flow of $1.05 billion in fiscal 2024, and it remains committed to generating $1.2 billion free cash flow in fiscal 2025. Strong growth in free cash flow indicates efficient financial management practices, optimum utilization of assets and improved operational efficiency.

It has a long-term earnings growth expectation of 11.89% and delivered an earnings surprise of 3.52%, on average, in the trailing four quarters. JBL has an average brokerage recommendation (ABR) of 1.44 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.

Key Picks

Keysight Technologies, Inc. KEYS sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.

InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.

The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

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