A month has gone by since the last earnings report for Synnex (SNX Quick QuoteSNX - Free Report) . Shares have lost about 7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Synnex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

TD SYNNEX Q1 Earnings Beat, Revenues Miss Estimates

TD SYNNEX reported first-quarter fiscal 2023 non-GAAP earnings of $2.93 per share, which surpassed the Zacks Consensus Estimate of $2.83 per share but decreased 3.3% year over year. The decline in bottom line was primarily caused by increased interest expenses.

Revenues of $15.13 billion decreased 2% year over year and missed the consensus mark of $15.74 billion. Although the company continues to witness strong demand for its technology products and services across Asia-Pacific and Japan region (18.4% year-over-year growth), the remaining two regions, Americas and Europe, witnessed year-over-year decreases due to a mix shift to high-growth technologies.

Also, an unfavorable foreign currency exchange rate significantly impacted sales growth. On a constant-currency basis, first-quarter revenues increased merely 0.7%.

Quarterly Details

The non-GAAP gross profit grew 1.7% year over year to $1 billion, while the non-GAAP gross margin improved 30 basis points (bps) to 6.7%. Adjusted SG&A expenses increased to $568.1 million from the year-ago quarter’s $561.9 million.

In the reported quarter, the non-GAAP operating income was up 2.6% to $443 million. Moreover, the non-GAAP operating margin increased 14 bps on a year-over-year basis to 2.93%.

TD SYNNEX ended the fiscal first quarter with cash and cash equivalents of $510.2 million compared with $522.6 million witnessed at the end of the fiscal fourth quarter. During the reported quarter, SNX used $103 million in cash from operational activities.

The company returned $148 million to shareholders in the first quarter by repurchasing stocks worth $115 million and paying out $33 million in dividends.

SNX announced a quarterly cash dividend of 35 cents per share payable on Apr 28, 2023, to the shareholders of record on Apr 14, 2023.

Guidance

For the second quarter, it expects to generate revenues between $14 billion and $15 billion.

The non-GAAP net income is estimated in the range of $214-$261 million. Moreover, TD SYNNEX projects non-GAAP earnings between $2.25 and $2.75 per share for the second quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -12.81% due to these changes.

VGM Scores

At this time, Synnex has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Synnex has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.