Jabil (JBL -0.57%) stumbled on Thursday, bottoming out at a 9.7% price dip just after 10 a.m. ET before ending the day down 6.7%. The circuit board and electronics manufacturer posted fourth-quarter results for fiscal year 2025 early in the morning, easily beating Wall Street's consensus estimates and setting next-quarter guidance comfortably above the current Street view.
When good news meets a grumpy market
Jabil crushed Q4 targets and issued bullish guidance for the next period, but the stock plummeted anyway. Management even spent a large chunk of the earnings call discussing the company's use of artificial intelligence (AI) and robotics to make the manufacturing process more efficient. AI-related sales are expected to rise 25% next year.
That report checked lots of bullish boxes, and Jabil's stock fell anyway. What's going on?
Well, Jabil approached this report with a full head of steam, having gained 99.6% in 52 weeks as of Wednesday night. The stock traded at a lofty 43.7 times trailing earnings. The reported results were impressive, but apparently not enough to support Jabil at these nosebleed-inducing levels.
Furthermore, Jabil's explosive AI growth was undermined by weak results in other areas. Sales to the automotive market fell 5% year over year, healthcare revenues only increased by 4%, and connected living sales plunged 27%. Those are scary numbers if investors expect high growth across the board.
Oh, and the 25% AI growth target in 2026 is less impressive next to an 80% jump in 2025. The rocket-ship part of this surge seems to be over.
Image source: Getty Images.
Not exactly a bargain-bin situation
So Jabil's bears found some substantial support in this report, but the price dip is relative to a long uptrend. After today's drop, the stock is still up by 86% over the last year.
The quick price correction didn't make Jabil's stock extremely cheap, either. It trades at 41 times trailing earnings today. That's a lot for a traditional manufacturer that's just getting its feet wet in the high-octane AI pool.
