SYNNEX Corp (SNX - Snapshot Report) continued its impressive earnings surprise streak a few weeks ago and estimates are up nicely.
The recent market activity has kept shares lower, but that just leaves dirt-cheap valuations for this Zacks #1 Rank (Strong Buy).
SYNNEX Corp offers IT, supply chain management, contract assembly, and other services to OEMs, retailers, and resellers.
Top and Bottom Line Growth
On Sep 27 SYNNEX Corp announced an 18% increase in revenues for the third quarter. Sales came in at $2.6 billion for the period.
Net income came in at $39 million, a 26% improvement. Earnings per share jumped more than 24%, to $1.07. That was 18 cents higher than the Zacks Consensus Estimate, but the company is no stranger to surprises as they have beaten expectations in all buy 1 quarter in the past 5 years.
Analysts quickly revised their outlooks on the earnings news. The Zacks Consensus Estimate for this year compensated for the surprise, rising 18 cents to $3.84. But, the fiscal 2012 forecasts are also up and now average $4.06.
Last year SYNNEX made $3.26, so the current projections are calling for earnings growth of 18% this year and another 6% next year.
Valuations Look Good
Shares of SNX are going at just under book value and with a 0.1 price to sales ration. The forward P/E works out to 7 times, giving shares a PEG of 0.7 times.
Take a look below at the earnings trend. Those colored lines represent a particular year's Zacks Consensus Estimate and are showing a great long-term trend.
The last time shares traded with a handle in the 20's the earnings were much lower. So, once the market calms down, shares of SNX have some serious climbing to do.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service