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Synnex (SNX) Down 4.6% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Synnex (SNX - Free Report) . Shares have lost about 4.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
TD SYNNEX Beats Q3 Earnings Estimates, Misses on Revenues
SYNNEX delivered mixed third-quarter fiscal 2021 results, wherein the bottom line surpassed the Zacks Consensus Estimate while revenues missed the mark.
Notably, TD SYNNEX was formerly known as SYNNEX Corporation, but the company changed its name after the acquisition of Tech Data Corporation on Sep 1. As the company’s fiscal third quarter ended on Aug 31, the quarterly results would only reflect the legacy SYNNEX’s financial performance.
The company’s fiscal third-quarter non-GAAP earnings of $2.14 per share topped the Zacks Consensus Estimate by 4.9% and improved 13.8% year over year.
However, revenues fell 1.9% year over year to $5.21 billion. The top-line figure also missed the Zacks Consensus Estimate of $5.23 billion.
The company continues to witness strong demand for its technology products and services. In addition, a steady IT spending environment, backed by rapid digital transformations, was a positive. Nonetheless, the prevailing industry-wide supply-chain constraint resulted in a marginal year-over-year decline in the top line.
Quarterly Details
Gross profit grew 5.1% year over year to $312.6 million, while gross margin expanded 40 basis points (bps) to 6%. Total selling, general & administrative (SG&A) expenses decreased to $164.4 million from the year-ago quarter’s $165.1 million.
In the reported quarter, non-GAAP operating income was up 13.2% to $168.2 million. Also, non-GAAP operating margin expanded 43 bps on a year-over-year basis to 3.23%.
SYNNEX ended the fiscal third quarter with cash and cash equivalents of $4.05 billion compared with the $1.7 billion witnessed at the end of the fiscal second quarter.
During the fiscal third quarter, the company used $56 million of net cash for operational activities.
Additionally, the company announced that its board of directors has declared a quarterly cash dividend of 20 cents per share. The newly-approved dividend will be payable on Oct 29 to shareholders of record as of Oct 15, 2021.
Guidance
For the fourth quarter of fiscal 2021, revenues are expected between $15 billion and $16 billion.
The non-GAAP net income is estimated in the range of $242-$272 million. Moreover, the company projects non-GAAP earnings between $2.50 and $2.80 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 8.77% due to these changes.
VGM Scores
Currently, Synnex has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Synnex has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Synnex (SNX) Down 4.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Synnex (SNX - Free Report) . Shares have lost about 4.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
TD SYNNEX Beats Q3 Earnings Estimates, Misses on Revenues
SYNNEX delivered mixed third-quarter fiscal 2021 results, wherein the bottom line surpassed the Zacks Consensus Estimate while revenues missed the mark.
Notably, TD SYNNEX was formerly known as SYNNEX Corporation, but the company changed its name after the acquisition of Tech Data Corporation on Sep 1. As the company’s fiscal third quarter ended on Aug 31, the quarterly results would only reflect the legacy SYNNEX’s financial performance.
The company’s fiscal third-quarter non-GAAP earnings of $2.14 per share topped the Zacks Consensus Estimate by 4.9% and improved 13.8% year over year.
However, revenues fell 1.9% year over year to $5.21 billion. The top-line figure also missed the Zacks Consensus Estimate of $5.23 billion.
The company continues to witness strong demand for its technology products and services. In addition, a steady IT spending environment, backed by rapid digital transformations, was a positive. Nonetheless, the prevailing industry-wide supply-chain constraint resulted in a marginal year-over-year decline in the top line.
Quarterly Details
Gross profit grew 5.1% year over year to $312.6 million, while gross margin expanded 40 basis points (bps) to 6%. Total selling, general & administrative (SG&A) expenses decreased to $164.4 million from the year-ago quarter’s $165.1 million.
In the reported quarter, non-GAAP operating income was up 13.2% to $168.2 million. Also, non-GAAP operating margin expanded 43 bps on a year-over-year basis to 3.23%.
SYNNEX ended the fiscal third quarter with cash and cash equivalents of $4.05 billion compared with the $1.7 billion witnessed at the end of the fiscal second quarter.
During the fiscal third quarter, the company used $56 million of net cash for operational activities.
Additionally, the company announced that its board of directors has declared a quarterly cash dividend of 20 cents per share. The newly-approved dividend will be payable on Oct 29 to shareholders of record as of Oct 15, 2021.
Guidance
For the fourth quarter of fiscal 2021, revenues are expected between $15 billion and $16 billion.
The non-GAAP net income is estimated in the range of $242-$272 million. Moreover, the company projects non-GAAP earnings between $2.50 and $2.80 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 8.77% due to these changes.
VGM Scores
Currently, Synnex has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Synnex has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.