It has been about a month since the last earnings report for Synnex (SNX Quick QuoteSNX - Free Report) . Shares have lost about 7.4% 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 drivers.

TD SYNNEX Q4 Earnings and Revenues Beat Estimates

TD SYNNEX reported better-than-expected results for the fourth quarter of fiscal 2022. Moreover, the key metrics — revenues and earnings — registered strong year-over-year growth despite headwinds from unfavorable foreign currency and interest expenses.

SNX’s non-GAAP earnings of $3.44 per share surpassed the Zacks Consensus Estimate of $2.92 and increased 20.3% year over year. The robust bottom line was primarily driven by increased revenues, a mix shift to high-growth technologies, cost discipline and merger synergy executions.

Revenues increased 4.1% year over year to $16.2 billion, surpassing the consensus mark of $15.78 billion. The company continues to witness the strong demand for its technology products and services across all three regions — Americas, Europe, and the Asia-Pacific and Japan — primarily due to strong growth in its Advanced Solutions portfolio and high-growth technologies.

However, an unfavorable foreign currency exchange rate significantly impacted sales growth. On a constant-currency basis, fourth-quarter revenues increased 10.5%.

Quarterly Details

The gross profit grew 11.5% year over year to $1.08 million, while the gross margin improved 44 basis points to 6.63%. Adjusted SG&A expenses increased to $581.9 million from the year-ago quarter’s $558.7 million.

In the reported quarter, the non-GAAP operating income was up 21.5% to $495.6 million. Moreover, the non-GAAP operating margin increased 44 bps on a year-over-year basis to 3.05%.

TD SYNNEX ended the fiscal fourth quarter with cash and cash equivalents of $522.6 million compared with the $350.8 million witnessed at the end of the fiscal third quarter. During the reported quarter, SNX used $67 million in cash from operational activities.

The company returned $71 million to shareholders in the fourth quarter by repurchasing stocks worth $42 million and paying out $29 million in dividends. During fiscal 2022, it returned $240 million by repurchasing shares worth $125 million and $115 million via dividend payouts.

The company raised the quarterly cash dividend rate by 17% quarter over quarter to 35 cents per share. Moreover, it replaced the previous three-year share repurchase program with the new three-year buyback authorization limit of $1 billion.

Guidance

SNX issued dismal guidance for the first quarter of fiscal 2023. For the first quarter, it expects to generate revenues between $15.2 billion and $16.2 billion.

The non-GAAP net income is estimated in the range of $248-$287 million. Moreover, TD SYNNEX projects non-GAAP earnings between $2.60 and $3.00 per share for the first quarter.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -5.94% due to these changes.

VGM Scores

At this time, Synnex has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. 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 A. 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.