It has been about a month since the last earnings report for Synnex (SNX Quick QuoteSNX - Free Report) . Shares have added about 5.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Synnex due for a pullback? 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 Q3 Earnings Miss Estimates, Revenues Beat

TD SYNNEX reported mixed results for the third quarter of fiscal 2022, wherein earnings missed the Zacks Consensus Estimate while revenues topped the same. However, both metrics marked strong growth on a year-over-year basis.

The company’s fiscal third-quarter non-GAAP earnings of $2.74 per share narrowly missed the Zacks Consensus Estimate of $2.75 but increased 28% year over year. Revenues jumped 194.9% year over year to $15.36 billion, surpassing the consensus mark of $15.11 billion. The upside was due to the inclusion of revenues from the last year’s merger of Tech Data Corporation.

TD SYNNEX was formerly known as SYNNEX Corporation, but the company changed its name after the acquisition of Tech Data Corporation in September 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, the prevailing industry-wide supply-chain constraints negatively impacted the top line.

Quarterly Details

The gross profits grew 193% year over year to $916 million, while the gross margin remained flat at 6%. Adjusted SG&A expenses jumped to $543.7 million from the year-ago quarter’s $144.4 million.

In the reported quarter, the non-GAAP operating income was up 136.7% to $398.3 million. However, the non-GAAP operating margin contracted 64 bps on a year-over-year basis to 2.59%.

TD SYNNEX ended the fiscal third quarter with cash and cash equivalents of $350.8 million compared with the $521.5 million witnessed at the end of the fiscal second quarter. During the reported quarter, SNX used $67 million in cash from operational activities.

The company repurchased shares worth $30 million in the fiscal third quarter and $83 million in the first nine months of fiscal 2022.

Additionally, TD SYNNEX announced that its board of directors declared a quarterly cash dividend of 30 cents per share. The newly approved dividend will be payable on Oct 28 to shareholders of record as of Oct 14.

Guidance

On its fourth-quarter fiscal 2021 earnings call, the company stated that it expects to return approximately 50% of its cash flow to shareholders in the form of dividends and share buybacks over the next two to three years.

SNX issued strong guidance for the fiscal fourth quarter. For fourth-quarter fiscal 2022, it expects to generate revenues between $15.2 billion and $16.2 billion.

Non-GAAP net income is estimated in the range of $259-$298 million. Moreover, TD SYNNEX projects non-GAAP earnings between $2.70 and $3.10 per share for the fourth quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Synnex has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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. Notably, Synnex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.