Yahoo Finance TD SYNNEX (SNX) Up 1.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for TD SYNNEX (SNX). Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TD 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 its most recent earnings report in order to get a better handle on the important catalysts.
TD SYNNEX Q1 Earnings Surpass Estimates, Sales Fall Y/Y
TD SYNNEX reported first-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $2.99, beating the Zacks Consensus Estimate of $2.86. The company reported earnings of $3.13 in the previous quarter and $2.93 in the year-ago quarter.
SNX’s quarterly revenues declined 7.6% year over year to $13.97 billion. The top line missed the Zacks Consensus Estimate of $14.37 billion.
The company’s results reflected benefits from market recovery, improving IT demand environment, diversification of portfolio and expansion of global line cards. TD SYNNEX’s PC division experienced growth across the Americas, Asia Pacific and Japan.
Quarterly Details
The non-GAAP gross profit declined 0.5% year over year to $1.01 million, while the gross margin improved 52 basis points (bps) to 7.2%. Adjusted SG&A expenses increased to $581.2 million from the year-ago quarter’s $568 million.
In the reported quarter, the non-GAAP operating income was down 4.1% to $424.6 million. However, the non-GAAP operating margin increased 11 bps on a year-over-year basis to 3.04%.
TD SYNNEX ended the fiscal first quarter of 2024 with cash and cash equivalents of $1.03 billion compared with $1.03 billion reported at the end of the fiscal fourth quarter of 2023. During the reported quarter, SNX generated $385 million in cash from operational activities.
The company returned $235 million to shareholders in the first quarter by repurchasing stocks worth $199 million and paying out $36 million in dividends. In this quarter, SNX’s board of directors also approved a quarterly cash dividend of 40 cents per share, which is to be paid on Apr 26, 2024, to shareholders of record as of Apr 12, 2024.
The company also announced an approval for a share repurchase program of up to $2 billion for its common stock, adding to the existing program, which has around $197 million left.
Guidance
SNX issued guidance for the second quarter of fiscal 2024. For the second quarter, it expects to generate revenues between $13.3 billion and $14.9 billion (midpoint $14.1 billion).
The non-GAAP net income is estimated in the range of $219-$263 million. Moreover, TD SYNNEX projects non-GAAP EPS between $2.50 and $3 for the second quarter (midpoint $2.75).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, TD SYNNEX has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, 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 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, TD SYNNEX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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TD SYNNEX Corporation (SNX) : Free Stock Analysis Report
