Key Tronic: CEO Appears Bullish On The Potential For New $100 Million Contracts

Summary

Key Tronic delivered Q2 FY2021 revenue growth of 17% despite labor and shutdown issues as a result of the pandemic.

KTCC has substantial manufacturing capacity in Vietnam, Mexico, and the US and is ideally position to benefit from the ongoing US/China trade war.

Comments by the CEO on the Q1 conference call with respect to potential new $100 million contracts were confident and bullish.

Key Tronic is a BUY.

Key Tronic (KTCC) is a provider of electronics manufacturing services that delivered Q1 FY2021 revenue growth of 17% despite labor and shutdown challenges as a result of the global pandemic. Growth was led by successful ramp-up of new customer programs and increased demand from existing customers. Less than 7% of the company’s manufacturing capacity is done in a leased facility in China, with the vast majority of capacity in the US and Mexico. Forward guidance is solid and the company trades at a relative bargain with a P/E of only 17.4x. The potential for some new $100 million contract wins is bullish. Key Tronic is a BUY.

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