It has been about a month since the last earnings report for Synnex (SNX Quick QuoteSNX - Free Report) . Shares have lost about 1.5% in that time frame, outperforming 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 drivers.

TD SYNNEX Beats Q4 Earnings and Revenue Estimates

SYNNEX delivered better-than-expected fourth-quarter fiscal 2021 results. The company’s fiscal fourth-quarter non-GAAP earnings of $2.86 per share topped the Zacks Consensus Estimate by 7.5% and improved 1.4% year over year.

Revenues jumped 155.1% year over year to $15.61 billion, mainly attributable to the inclusion of revenues from the recently completed merger of Tech Data Corporation. The top line also surpassed the Zacks Consensus Estimate of $15.52 billion.

TD SYNNEX was formerly known as SYNNEX Corporation. The company changed its name after the acquisition of Tech Data Corporation on Sep 1, 2021.

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 an upside. However, prevailing industry-wide supply-chain constraints negatively impacted the top line.

Quarterly Details

Gross profit grew 157.2% year over year to $943.2 million, while gross margin remained flat at 6%. Adjusted selling, general & administrative expenses jumped to $558.7 million from the year-ago quarter’s $146.1 million.

In the reported quarter, non-GAAP operating income was up 84.9% to $407.9 million. However, non-GAAP operating margin contracted 100 basis points on a year-over-year basis to 2.61%.

TD SYNNEX ended the fiscal fourth quarter with cash and cash equivalents of $994 million compared with $4.05 billion witnessed at the end of the fiscal third quarter.

During the fiscal fourth quarter, SNX generated $561 million of cash from operational activities. During full-fiscal 2021, it generated operating cash flow of $810 million.

Additionally, the company announced that its board of directors has declared a quarterly cash dividend of 30 cents per share, 50% higher than the previous dividend rate. The newly approved dividend is payable on Jan 28 to shareholders of record as of Jan 21.

Guidance

For the first quarter of fiscal 2022, revenues are expected between $14.75 billion and $15.75 billion.

Non-GAAP net income is estimated in the range of $245-$275 million. Moreover, TD SYNNEX projects non-GAAP earnings between $2.55 and $2.85 per share.

For fiscal 2022, the company projects non-GAAP earnings in the range of $10.80-$11.20 per share. Moreover, TD SYNNEX expects to return approximately 50% of its cash flow to shareholders in the form of dividend and share buybacks over the next two to three years.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 15.8% due to these changes.

VGM Scores

Currently, Synnex has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 #1 (Strong Buy). We expect an above average return from the stock in the next few months.