We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SNX Expands Its Partner Base With LastPass: What Should Investors Do?
Read MoreHide Full Article
TD SYNNEX (SNX - Free Report) shares have gained 13.7% in the year-to-date period, underperforming the Zacks Computer and Technology Sector and the S&P 500 index’s growth of 30.6% and 27.1%, respectively. Although SNX’s current situation reflects low confidence among investors, the company is continuously expanding its footprint through new partnerships.
Recently, TD SYNNEX partnered with LastPass to make the latter’s password and identity management products accessible to IT resellers and managed service providers in North America. This partnership aims to streamline the purchasing process of LastPass products through SNX’s distribution network.
In the past year, TD SYNNEX has strengthened its partnership with industry leaders, including International Business Machines (IBM - Free Report) , Cisco (CSCO - Free Report) , Elastic and Amazon (AMZN - Free Report) . For instance, Tech Data became the authorized distributor of a Search AI Company namely Elastic throughout Australia and New Zealand.
TD SYNNEX also became IBM’s sole distribution partner throughout the English and Dutch Caribbean countries. TD SYNNEX has been in a long-term partnership with Amazon. It recently received the Amazon Relational Database Service Services Delivery Specialization designation.
Furthermore, Cisco has selected TD SYNNEX’s company Tech Data as its distribution partner in India. These partnerships contribute to TD SYNNEX’s long-term outlook, but, in the near term, TD SYNNEX is suffering from multiple headwinds.
TD SYNNEX YTD Performance
Image Source: Zacks Investment Research
Near-Term Challenges for TD SYNNEX
TD SYNNEX’s near-term growth prospects are suffering from softened IT spending as organizations push back their investments in big and expensive technology products on growing global slowdown concerns amid the current macroeconomic challenges and geopolitical tensions.
Higher-than-expected inflationary pressure has led to a substantial increase in component costs and wages, which is anticipated to continue hurting the company’s profitability in the next few quarters. TD SYNNEX also has a leveraged balance sheet. The company’s long-term debt has increased significantly in the last seven years to $3.74 billion as of Aug. 31, 2024, from $965 million as of Nov. 30, 2016.
TD SYNNEX’s financials have further been impacted by its major operations in China. The U.S.-China trade war is a major woe for the company. SNX expects to generate revenues between $14.9 billion and $15.7 billion in the fourth quarter of 2024. The Zacks Consensus Estimate for the same is pegged at $15.3 billion, indicating year-over-year growth of 6%. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $3.13, indicating a year-over-year decline of 2.24%.
What Should Investors Do?
Although TD SYNNEX’s expansion of the partner base aids its long-term growth, the near-term prospects might be hurt by macroeconomic, geopolitical and financial challenges.
Considering all these factors, we suggest investors to stay away from this Zacks Rank #4 (Sell) stock at present.
Image: Shutterstock
SNX Expands Its Partner Base With LastPass: What Should Investors Do?
TD SYNNEX (SNX - Free Report) shares have gained 13.7% in the year-to-date period, underperforming the Zacks Computer and Technology Sector and the S&P 500 index’s growth of 30.6% and 27.1%, respectively. Although SNX’s current situation reflects low confidence among investors, the company is continuously expanding its footprint through new partnerships.
Recently, TD SYNNEX partnered with LastPass to make the latter’s password and identity management products accessible to IT resellers and managed service providers in North America. This partnership aims to streamline the purchasing process of LastPass products through SNX’s distribution network.
In the past year, TD SYNNEX has strengthened its partnership with industry leaders, including International Business Machines (IBM - Free Report) , Cisco (CSCO - Free Report) , Elastic and Amazon (AMZN - Free Report) . For instance, Tech Data became the authorized distributor of a Search AI Company namely Elastic throughout Australia and New Zealand.
TD SYNNEX also became IBM’s sole distribution partner throughout the English and Dutch Caribbean countries. TD SYNNEX has been in a long-term partnership with Amazon. It recently received the Amazon Relational Database Service Services Delivery Specialization designation.
Furthermore, Cisco has selected TD SYNNEX’s company Tech Data as its distribution partner in India. These partnerships contribute to TD SYNNEX’s long-term outlook, but, in the near term, TD SYNNEX is suffering from multiple headwinds.
TD SYNNEX YTD Performance
Image Source: Zacks Investment Research
Near-Term Challenges for TD SYNNEX
TD SYNNEX’s near-term growth prospects are suffering from softened IT spending as organizations push back their investments in big and expensive technology products on growing global slowdown concerns amid the current macroeconomic challenges and geopolitical tensions.
Higher-than-expected inflationary pressure has led to a substantial increase in component costs and wages, which is anticipated to continue hurting the company’s profitability in the next few quarters. TD SYNNEX also has a leveraged balance sheet. The company’s long-term debt has increased significantly in the last seven years to $3.74 billion as of Aug. 31, 2024, from $965 million as of Nov. 30, 2016.
TD SYNNEX’s financials have further been impacted by its major operations in China. The U.S.-China trade war is a major woe for the company. SNX expects to generate revenues between $14.9 billion and $15.7 billion in the fourth quarter of 2024. The Zacks Consensus Estimate for the same is pegged at $15.3 billion, indicating year-over-year growth of 6%. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $3.13, indicating a year-over-year decline of 2.24%.
What Should Investors Do?
Although TD SYNNEX’s expansion of the partner base aids its long-term growth, the near-term prospects might be hurt by macroeconomic, geopolitical and financial challenges.
Considering all these factors, we suggest investors to stay away from this Zacks Rank #4 (Sell) stock at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.