SYNNEX Corporation

SYNNEX Corporation (SNX - Snapshot Report) surprised on estimates for the 8th quarter in a row in September as sales grew quarter over quarter. The company is cheap, trading with a price-to-book ratio of just 1.25.

Company Description

SYNNEX distributes IT systems, peripherals, system components, software and networking equipment to more than 15,000 resellers throughout the United States, Canada and Mexico for OEM suppliers such as Hewlett Packard (HP - Snapshot Report), IBM (IBM - Analyst Report), Intel (INTC - Analyst Report), and Microsoft (MSFT - Analyst Report).

Surprise Streak Continued in the Third Quarter

On Sep 21, SYNNEX reported third quarter results that easily surprised on the Zacks Consensus Estimate by 9.84%. Earnings per share were 67 cents compared to the Zacks Consensus of 61 cents. This was also 1 cent better than the year ago period.

Revenues still saw a year over year decrease of 1.88% to $2.01 billion from $2.05 billion in the third quarter of 2008. The company saw revenue growth quarter over quarter of 10.8%. The quarter was boosted by 17.7% growth in the Global Business Services segment.

Fourth Quarter Outlook

The company believes the market has stabilized since the February quarter and it's optimistic about the rest of the year. Revenues are expected in the range of $2.025 billion and $2.125 billion. Earnings per share are forecast between 72 and 75 cents.

Zacks Consensus Estimates Rise

Given the company's earnings surprise and fourth quarter forecast, covering analysts have been raising estimates over the last quarter. The fourth quarter Zacks Consensus Estimate jumped 3 cents to 75 cents, which is the high end of the company's guidance range.

Full year Zacks Consensus Estimates are up 8 cents to $2.57 per share with 4 out of 5 analysts raising in the last month.

Value Fundamentals

SYNNEX is a Zacks #1 Rank (strong buy) stock. The company has a solid 5-year average return on equity (ROE) of 11.48%.

It is trading with a forward P/E of 11.5 despite the stock being at multi-year highs.

See the 5-year chart below: