Freedom Capital Markets has maintained a Buy recommendation and a $54.00 price target on Flexsteel Industries (NASDAQ:FLXS) following the company’s fiscal second quarter 2026 financial results. The call comes alongside data showing Flexsteel trading at a price-to-earnings ratio of 10.75, a level described as low against its near-term earnings growth potential.
For the quarter, Flexsteel reported net sales of $118.2 million, a 9.0% increase from the same period a year earlier. Management attributed the top-line advance to volume growth and pricing adjustments related to tariffs, sustaining the firm’s upward revenue trend. On a last-twelve-month basis, Flexsteel’s revenue reached $447.5 million.
On the profitability front, diluted earnings per share were $1.18 for the quarter, down from $1.62 in the prior-year period. When adjusted for certain items, EPS rose to $1.18 from $0.95 year-over-year, signaling improvement in core operating performance despite the decline in GAAP diluted EPS.
Operating margin narrowed to 7.6% from 10.7% a year earlier. The company said the reduction was primarily driven by normalization and investments intended to support growth initiatives, which weighed on margin in the period.
Market participants responded positively to the results: Flexsteel shares traded higher by 4.07% on the day the quarterly figures were released.
Earnings and revenue vs. expectations
Flexsteel outperformed analysts’ projections for the quarter. Reported EPS of $1.18 exceeded the $0.79 expected by analysts, producing a positive surprise of 49.37%. Revenue also topped forecasts, with actual sales of $118.25 million compared with consensus estimates of $107.51 million.
Analysts taking note of the company’s performance highlighted the strength of the reported earnings and revenue. The quarter’s results placed Flexsteel in a favorable position among industry forecasts, according to those observations.
Context and implications
The combination of higher sales and an improved adjusted EPS suggests stronger underlying operations, while the compression in operating margin reflects a period of normalization and directed spending on growth. The reiterated Buy rating and $54.00 price target indicate continued analyst confidence in the company’s near-term prospects, supported by the valuation metric noted above.
What the report does not address
The company and the analyst commentary in the period did not provide additional forward-looking guidance or specifics on the timing and scale of the investments described as growth initiatives. Those details remain limited in the information provided with the quarterly release.
Summary
Freedom Capital’s Buy rating and $54 price target followed a quarter in which Flexsteel delivered revenue growth, an adjusted EPS improvement, and results that beat Wall Street expectations, while operating margin declined amid normalization and growth investment. Shares moved higher on the news.