TD SYNNEX Corporation (SNX) on Q2 2021 Results - Earnings Call Transcript
Operator: Good afternoon. My name is Jeff and I'll be your conference operator today. I would like to welcome everyone to the SYNNEX Second Quarter Fiscal 2021 Earnings Call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. At this time for opening remarks, I would like to pass the call over to Liz Morali, Head of Investor Relations. Liz, you may begin. Liz Morali: Thank you, Jeff and good afternoon to everyone. Thank you for joining us for today's call. With me today are Dennis Polk, President and CEO and Marshall Witt, CFO. Before we continue, let me remind everyone that today's discussion contains forward-looking statements within the meaning of the Federal Securities Laws, including predictions, estimates, projections or other statements about future events, including the benefits of the proposed merger to our various stakeholders, timing of the merger, capital structure, and growth. Marshall Witt: Thanks Liz and thank you to everyone joining us for today's call. Before getting into the details of the quarter's performance, I would like to remind everyone that the year ago quarter was the first full quarter impacted by the COVID-19 pandemic. Given the significant negative impact that this had on our fiscal Q2 2020 results, the year-over-year comparisons that we discuss today are greater than normal in magnitude. Our fiscal Q2 results came in well ahead of our expectations, fueled by continued strong demand environment. Total revenue for Q2 was up 31% year-over-year to $5.9 billion. Gross profit increased 20% or $55 million compared to the prior year to $329 million. Gross margin was 5.6%, down from 6.1% in the prior year, primarily due to product mix. Total adjusted SG&A expense was $159 million or 2.7% of revenue, down $14 million compared to the year ago quarter, primarily due to COVID-related expenses in the prior year. Non-GAAP operating income was $170 million, improved by $68 million or 67% versus the prior year and non-GAAP operating margin was 2.9%, up 62 basis points year-over-year. Q2 interest expense and finance charges were approximately $23 million and the effective tax rate was 25%, both in line with our expectation. Total non-GAAP income from continuing operations was $109 million, up $44 million and improved by 68% over the prior year and non-GAAP diluted EPS from continuing operations was $2.09, up from $1.26 in the prior year. Now, turning to the balance sheet. We ended the quarter with cash and cash equivalents of $1.7 billion and debt of $1.6 billion. Accounts receivable totaled $2.5 billion, down 12% year-over-year and inventories totaled $2.7 billion, flat from the prior year. Dennis Polk: Thank you, Marshall and thank you to everyone joining our call. I want to start off with a special thank you along with much appreciation to our associates for delivering very strong results in Q2. With our quarter starting off with the Tech Data merger announcement, there was a potential of this news being a distraction to our daily efforts. As expected though our team executed very well, provided exceptional service to our customers and continued to expertly manage through the ongoing dynamics of our industry and the pandemic. For Q2, our results came in above our internal expectations due to continued demand for remote capability, digital transformation, the ongoing recovery of office and data center IT purchasing, and overall above market growth. Operator: First question from the line of Ruplu Bhattacharya of Bank of America. Your line is open. Ruplu Bhattacharya: Hi. Thank you for taking my questions. My first question is on margin performance. Marshall, can you help us bridge the operating margin between fiscal 1Q and fiscal 2Q sequentially? Looks like you had a stronger than expected revenue performance, I mean, revenues were up $900 million plus sequentially. Just looks like operating margins were down about 26 bps, how much of that was FX? How much of that was mix related? And how much of that was COVID-related cost if you can just help us bridge that margin performance? Marshall Witt: Sure, I'll walk through it Ruplu. Yes, most of it was just mix related in terms of the sequential relationship from Q1 to Q2. If you look at the underlying performance of the various sectors of our business, they all did very well. It was a good overall balanced contribution from all locations and as Dennis said in his remarks across the spectrum of products and end market. Dennis Polk: And Ruplu, I would just add, we performed very well now through Q1 and Q2. So, in Q2, we had some compensation accruals we had to make to recognize that strong performance by the team. Ruplu Bhattacharya: Okay. Okay, thanks for the details on that. Maybe for my follow-up, can you talk a little bit about the higher consignment model transition? Did I hear correctly that that transition will not happen in 3Q or 4Q of this year? And when it does happen in fiscal 2022, what is the expectation for revenues per quarter impact? Marshall Witt: Ruplu, you're right. For 2021, as I said in my prepared remarks, we don't anticipate it transacting or taking place this year. As we think about next year, we'll have to face that when we get there. Ruplu Bhattacharya: Okay. Dennis Polk: And just my follow-up Ruplu, would be -- we're just staying flexible and assisting our customer and their needs. Clearly the consignment program is taking longer to execute and when they desire to do so, be it whatever time is 2021, we'll help them out at that time. Ruplu Bhattacharya: Okay, great. If I can just squeeze in one more. Just Marshall on your capital allocation plan, I know the transaction is expected to close later this year. In the meantime, are you -- do you still have share repurchase authorization left, how much is left on that? And just your thoughts on your inorganic growth versus spending on buybacks till that transaction happens? Marshall Witt: Ruplu, yes, right now, as we've said in our March discussion with you in regards to only our results but the merger, our overall goal right now is to ensure that we keep our leverage ratios appropriate as we enter into the transaction. We do have an open repurchase program in place. But we anticipate that to be more anti-dilutive than it is actually going beyond that. So that will be our intent of heading into the merger. And just in terms of the overall just allocation of dividends, we're happy to announce another $0.20 this quarter. That won't change as we move forward. But we really are thinking about keeping the position of strength we have on a real strong current and long-term capital structure, really well laid out as we go into the merger. Ruplu Bhattacharya: Okay, thanks for all the details. Appreciate it. Marshall Witt: You're welcome. Operator: Next question from the line of Vincent Colicchio of Barrington Research. Your line is open. Vincent Colicchio: Yes. In your prepared remarks, you talked about most -- some of the regulatory approvals have occurred already. Does that -- was that most of the approvals? To what extent are approvals remaining in the balance? Dennis Polk: Hi Vince, this is Dennis. Yes, so we had -- we have about 20 regulatory approvals to work our way through. And I'd say at this point, we're more than halfway through. Vincent Colicchio: Okay. Thanks for that clarity. In terms of supply chain constraints, where are the biggest constraints, any color would be helpful? Dennis Polk: Yes, really, Vince, across the board, it's in client devices constraints, networking, certainly CPUs, even displays and some print products. So, there wasn't a major product category that we serve that has not been affected by supply chain challenges. Certainly over the last quarter, but really, frankly, over the last 15 to 18 months. Vincent Colicchio: Thank you. Nice quarter. Dennis Polk: Thank you. Operator: Next question from the line of Jim Suva of Citigroup Investment. Your line is open. Jim Suva: Thank you. In your prepared comments, you mentioned about your forecasting and being conservative on the outlook. My question is regarding that conservativism, is it probably accurate that your lead-times and visibility for the demand side is better than expected? But you're being more conservative on the ability to procure supply? Or are you also discounting the demand to some extent? Dennis Polk: No, I'd say, -- Jim, thank you for the question and glad to hear you back covering our account again. Thank you. I'd say that it's really more the completion of the product and delivery is, is what's making us most cautious for the lead-time is causing the conservative aspects in our guidance. I should say I don't want our investors to oversteer too much on this conservatism that we're placing on our forecast. To put a number around it, it's about $150 million to $200 million that we reduce from what would be our normal forecast for the higher or elevated challenges in the supply chain that we're experiencing right now. As I responded to Vince a few seconds ago, supply chain challenges have been going on for good year and a half plus, but was just elevation and the tightness, if you will, of SLAs and everything takes to get products to our customers, we start to be a little more conservative quarter to the tune of about $150 million to $200 million. Jim Suva: Great, thank you so much for the detail and additional commentary. It's greatly appreciated. Dennis Polk: Thank you, Jim. Marshall Witt: Thanks Jim. Operator: Next question from the line of Adam Tindle of Raymond James. Your line is open. Adam Tindle: Okay, thanks. Good afternoon. Dennis, I wanted to start -- you talked about getting internal and external feedback since announcing the transaction, you've had more time to talk to both vendor/partners and customers. Just wondering if you could double click on feedback from each of those cohorts and how should we think about potential revenue synergy and dissynergy associated with that? Dennis Polk: Yes, Adam, thank you for the question. So, what I want to first start off with is the positive feedback is from what we classify as our four main constituents: our associates, our customers, our vendors, and our shareholders. So, since our announcement, we have received, again, positive feedback and recognition from all four categories, if you will. Specific to your question regarding our customers and our vendors. So, our customers are positive because they see us having a larger platform to service all their needs. SYNNEX prior to the merger, more of a niche from a vendor perspective and a geography perspective. But combined with Tech Data, build a service customers with all products sets and all geographies. So very, very positive and consistent feedback from that customer set as a result. From a vendor side, again, positive feedback from the fact that we'll have, again a global platform to service vendor needs wherever they want to sell their product. And as important, we'll be combined and able to consolidate our investments to invest where their business is going, either an as-a-service, cloud, or any other next-gen IT products. Adam Tindle: Okay. And I guess I just asked because when Tech Data acquired Avnet TS, one of their main competitors talked about $300 million or so share shift as both customers were seeking to diversify. I'm just wondering if investors should expect, obviously, the long-term makes a lot of sense, but near-term are there expectations for the synergies to the tune of that sort of magnitude? Dennis Polk: Adam, our expectation is to grow the combined business. And we know through every acquisition prior and we expect through this acquisition. When we service your customer and your vendor partners, well, you get more business, not less, and that's our expectation for this transaction. Adam Tindle: Got it. And just as a follow-up, you talked about how a little bit of integration work that you've been able to do so far supports the strategic rationale behind this. Just wondering if you can also maybe double click on that comment, particularly any color on -- from a system standpoint, how you're potentially going to decide which will go on a SYNNEX home phone system versus updated SAP workflow integration would be helpful. Thank you. Dennis Polk: Sure, Adam. Thanks. So, I want to emphasize, during this period, there's only so much we can do. But the discussions we've able to have, again, reiterate and support our thesis for this transaction. Again, for the four constituents I talked about before. We also talked about how culturally, it was important for the two teams to come together, that's been solidified, as we've had discussions with our co-workers at Tech Data going forward. So, very, very happy about the cultural aspects that are going forward. And also to your point about the benefits of the merger from potential cross sell and other aspects, good ideas are coming out from those discussions as well. But I have to emphasize all preliminary, we need to close this transaction and get together and at that point time, I know we'll see all the benefits that we talked about back in March. Adam Tindle: Got it. Thank you very much. Dennis Polk: Thank you. Operator: The next question from the line of Matt Sheerin of Stifel. Your line is open. Matt Sheerin: Thank you. Good afternoon. I wanted to drill down a little bit more on your commentary regarding the demand picture. It sounds like it’s fairly robust across the board, specifically client devices and PCs. Could you talk about frankly you’re seeing SMB? I mean is there -- the education market continuing to be strong, do you still see legs to that PC cycle? And then on the infrastructure side, I know last quarter you started to see a little bit of a pickup in on-prem infrastructure spending. Are you continuing to see that and is that factored into your guidance? Dennis Polk: Hi Matt. Thanks for the question. Yes, so you talked about three categories there of our business and all three are positive, which is great to be experiencing right now. Specifically, you called out SMB. Certainly that was one of the more challenged areas of our business this time last year as a result of the pandemic and it was frankly, from our perspective, a slower recovery. But in the past few quarters, especially Q2, we really saw a real strong come back for the SMB environment. So, very encouraged by that and we’re hopeful that it continues throughout the rest of the year and beyond. Regarding state and local and fed business and specific to your educational comment, I called out in our prepared remarks public sector was very strong. That includes the education part of our business and we don’t see that business really changing too much in the coming months and quarters. It is affected by the supply chain challenges, so we have to factor that. But overall, our public sector business is very good. And then your last point was about enterprise spending, again, another area that was hit very hard. Q2 of this year was another quarter that was better than the last quarter. There is still not year-over-year growth across all of our enterprise products, but we’re starting to see growth in some of them and overall just the -- that sector of our business had another positive incremental growth than the prior quarters from the pandemic time. Matt Sheerin: Okay, great. That was very helpful. And then on my follow-up regarding your guidance on revenue and net income backing into the gross and operating margin, it looks like both will be up sequentially and back to or near the levels they were a couple of quarters ago. Is that a function of mix issues as well, the benefit of mix or anything else going on there? Marshall Witt: Yes, Matt, you’re exactly right. We see mix played a part in Q2 and we also see mix probably benefiting some of those margin improvements heading into Q3. Dennis Polk: Yes, Matt, I would just add, we’re still not at a point where everything is normal in our business and obviously normal from a pandemic standpoint. But as Marshall said, the mix and the business is definitely on the pathway towards that and our Q3 guidance is another step forward. Matt Sheerin: Understood. Okay. Thanks so much. Operator: Next question from the line of Ananda Baruah of Loop Capital. Your line is open. Ananda Baruah: Yes. Thanks a lot. I appreciate it. Thanks guys for taking the question and congrats on the strong execution and solid results. Yes, I guess the first one in my queue, it sounds like you guys are anticipating the IT spending environment to continue to strengthen. And so I guess the first question is, are you seeing the component environment tighten further as well? And then I have a quick follow-up. Thanks. Dennis Polk: Sure Ananda, this is Dennis. So, yes, we -- as we talked about in the prepared remarks, we are encouraged by IT demand overall. We talk about a lot that when companies and businesses and even individuals invest in technology product, they often get strong returns and we think that’s only going to continue going forward as digital transformation and other investments are made by businesses. So, we’re definitely positive about the marketplace that we’re in right now. Specific to your question about components and are they part of the supply chain challenges and tightening that we talked about. Yes, we definitely include components in that category. Ananda Baruah: Okay. And then just the PC business in general, it sounds like you guys are continuing to get really good demand and you sound sort of ongoingly optimistic about it. Some of the monthly data that’s come out of Taiwan, the OEM data has been choppy April to May. Do you see any -- I guess the question is are you seeing any change sort of in the cadence of demand from PCs in general? That’s it. I appreciate it. Thanks. Dennis Polk: Sure. Thank you. At this point in time, really nothing significant to call out from a cadence perspective. We’re obviously balancing our comments today against the supply chain challenge we talked about and obviously, receiving product and getting to our customers. So, that’s a factor. But if you’re talking about just overall demand, no we feel good about overall demand right now and don’t expect any change certainly in the quarter that we’re guiding to today. Ananda Baruah: That’s really helpful. Thank you, guys. I appreciate it. Dennis Polk: Thank you. Operator: Next question from the line of Shannon Cross of Cross Research. Your line is open. Shannon Cross: Thank you very much. I was curious, pricing, I realize you passed through pricing. But I’m wondering what you’re seeing in terms of price increases from some of your partners. And if you’re seeing any hesitancy from a customer perspective due to elasticity of demand and I’m thinking more on the IT hardware side. And then, I’m curious like from a component perspective just are there any timing issues we need to think about within Hive that might impact you given some of the expected increases in commodity prices. And then I have a follow up. Thank you. Dennis Polk: Hi, Shannon. This is Dennis. So, I’ll take in reverse order. From a Hive standpoint, no, do not seen any challenges necessarily from a pricing standpoint that will affect any aspect of the demand in our business -- for that segment of our business. As far as your overall question, certainly we’re in an environment where pricing is increasing more than not. But we have not seen any major issues as far as the continuation of our sales cycles and working with our reseller customers with their end customers such that it would hurt demand, if you will, in any way. Shannon Cross: Okay. And then it may be a bigger picture question. I know, we’ve talked a lot about revenue guidance and how you’re thinking about it. And I know you gave us the parameters of what to think about with regard to supply chain challenges. But given how much you have exceeded expectations for last few quarters, maybe if you could just walk through some of the puts and takes that you’re thinking about as you put together your guidance for the quarter that are beyond that I think you said $150 million, $200 million on the supply chain side just so we can have an idea of things to look for that could potentially lead to upside given you mentioned conservative several times in the script. Thank you. Dennis Polk: Thanks Shannon. So, I’ll start off with number one what you just talked about, we have about $150 million to $200 million of reduction in our forecast because of our conservatism on the supply chain challenges. That’s number one. Number two, we talk about the fact that for our manufacturing business internally we have a forecast that has a low and a high. We always take the low end and factor that into the numbers we guide to today with you because of the fact that that business is very unpredictable. We use the term lumpy, hard to predict. And so it always makes sense to guide to the low end and enjoying the benefit of performance above that. So, that’s a factor that I think is important for investors to know and that’s something we’ve been calling out for some time now. The third is just overall conservatism in our business. We want to make sure we perform well and hit our metrics. And so whenever we look at our numbers before we bring them to you and our investors, we obviously, put a little bit of a discount on that, just to make sure that when we produce our numbers at the end of the quarter, we meet them. Shannon Cross: Okay. Thank you. Dennis Polk: Thank you. Operator: Okay. And at this time there are no more questions. I will turn the call back to Dennis Polk for closing remarks. Dennis Polk: Very good. Thank you. In closing, I want to thank the SYNNEX team for their dedication and efforts. We have ongoing confidence in our business and look forward to the eventual combination with Tech Data. Stay well. Thank you. Operator: Thank you. And that concludes today's conference. Thank you everyone for participating. You may now disconnect.
Loop Capital Raises TD Synnex Target on Strong IT Demand and Growth Momentum
Loop Capital raised its price target on TD SYNNEX (NYSE:SNX) to $160 from $150 while reiterating a Buy rating, citing the company’s robust performance in IT distribution and hyperscale solutions, as well as continued momentum across key segments.
The firm highlighted TD Synnex’s better-than-expected May quarter results, which featured 7% year-over-year revenue growth and a 10% increase in EPS. Endpoint Solutions gross billings rose 13% YoY, benefiting from an ongoing PC refresh cycle that SNX believes is only halfway through, with additional demand expected as organizations adopt Windows 11.
Advanced Solutions, excluding Hyve, grew 10% YoY, supported by strong activity in data center infrastructure, cloud, security, and AI technologies. Meanwhile, Hyve posted high-teen gross billings growth, including a 45% surge in its ODM/CM business driven by its largest customer and recovering orders from a key second customer.
While Hyve’s gross margin dipped sequentially due to FX impacts and product mix, management signaled stabilizing margins and future improvement thanks to strategic investments and a broader customer base. Loop Capital’s increased target reflects confidence in SNX’s ability to sustain growth and capitalize on secular trends in IT modernization and cloud infrastructure.
TD Synnex (NYSE:SNX) - A Leading IT Distributor with Strong Growth Potential
TD Synnex (NYSE:SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. The company provides a wide range of technology products and services, catering to various industries. As a major player in the IT distribution sector, TD Synnex competes with other large firms like Ingram Micro and Arrow Electronics.
On June 25, 2025, David Paige from RBC Capital set a price target of $145 for SNX, which was trading at $137.79 at the time. This suggests a potential price increase of approximately 5.23%. The analysis, published by Benzinga, highlights the growth potential of TD Synnex, despite facing short-term margin pressures.
The company's recent upgrade to a "buy" rating follows its strong second-quarter 2025 results. These results demonstrated broad-based growth, strong execution, and improved demand visibility. The turnaround of Hyve and new transparency have resolved significant overhangs, with demand resuming from major customers, contributing to clear growth.
TD Synnex's aggressive capital returns through buybacks and dividends are supporting the stock. These actions are aiding in achieving the company's target of double-digit EPS growth. The stock has experienced a price change of $0.91, reflecting a percentage increase of 0.66%, with a current price of $137.79.
The stock has fluctuated between a low of $133.75 and a high of $138.08 today. Over the past year, SNX has reached a high of $145.10 and a low of $92.23. The company's market capitalization is approximately $11.56 billion, with a trading volume of 1,569,971 shares.
TD SYNNEX Tops Q2 Estimates, Stock Gains 5%
TD SYNNEX (NYSE:SNX) reported solid fiscal second-quarter results that exceeded expectations on both the top and bottom line. As a result, the company’s shares rose more than 5% intra-day today.
Adjusted earnings per share came in at $2.99, beating the $2.71 analyst consensus. Revenue grew 7.2% year-over-year to $14.95 billion, also topping forecasts of $14.3 billion. Non-GAAP gross billings rose 12.1% to $21.6 billion, while the company maintained a stable operating margin of 2.8%.
CEO Patrick Zammit credited the strong performance to continued momentum in IT distribution and hyperscaler markets, as well as disciplined execution that allowed TD SYNNEX to outperform industry growth.
Looking ahead, the company issued Q3 guidance for adjusted EPS in the range of $2.75 to $3.25, straddling the $2.96 consensus. Revenue is expected between $14.7 billion and $15.5 billion, slightly above Wall Street’s $15.02 billion estimate at the midpoint.
Regionally, the Americas led with $9.0 billion in revenue, up 5.3%, while Europe climbed 10.5% to $4.9 billion. Asia-Pacific and Japan posted an 8.7% increase to $1.0 billion, reflecting broad-based growth.
Despite the positive results and outlook, the stock’s modest decline suggests investors may be weighing near-term volatility or margin pressures against the company’s longer-term trajectory.
TD SYNNEX (NYSE:SNX) Earnings Preview: Key Financial Insights
- Earnings per Share (EPS) estimate is set at $2.69 with projected revenue of approximately $14.3 billion.
- Analysts forecast a 1.5% decline in EPS year-over-year, despite a 2.7% increase in revenue.
- The company's price-to-earnings (P/E) ratio is 15.19, and its price-to-sales ratio stands at 0.18, indicating a moderate to low market valuation.
TD SYNNEX (NYSE:SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. The company provides a wide range of technology products, services, and solutions to its clients. As SNX prepares to release its quarterly earnings on June 24, 2025, Wall Street analysts have set their sights on an earnings per share (EPS) estimate of $2.69 and projected revenue of approximately $14.3 billion.
Analysts expect SNX's earnings per share to decline by 1.5% year-over-year, despite a 2.7% increase in revenue to $14.3 billion. This mixed outlook reflects the company's ability to grow its top line while facing challenges in maintaining its profit margins. Over the past month, the consensus EPS estimate has been revised upward by 1%, signaling a positive shift in analysts' expectations.
The market will be closely monitoring SNX's performance to see if it can exceed these estimates. Surpassing expectations could lead to a rise in the stock price, while failing to meet them might result in a decline. The company's price-to-earnings (P/E) ratio of 15.19 suggests a moderate market valuation of its earnings, while its price-to-sales ratio of 0.18 indicates a relatively low market valuation compared to its sales.
SNX's enterprise value to sales ratio stands at 0.24, reflecting its total valuation in relation to revenue. However, the enterprise value to operating cash flow ratio is notably high at 167.32, which may indicate a premium valuation or lower cash flow generation relative to its enterprise value. The company's earnings yield of 6.58% provides insight into the return on investment for shareholders.
With a debt-to-equity ratio of 0.54, SNX maintains a moderate level of debt compared to its equity, suggesting a balanced approach to financing. Additionally, the current ratio of 1.27 indicates that the company has a reasonable level of liquidity to cover its short-term liabilities. As SNX approaches its earnings release, investors will be keen to see how these financial metrics influence the company's future performance.
TD SYNNEX Sinks 16% After Earnings Miss and Weak Q2 Guidance
TD SYNNEX (NYSE:SNX) shares plunged over 16% intra-day today, after the company reported disappointing fiscal first-quarter results and issued underwhelming guidance for Q2, sparking investor concern about near-term performance.
For Q1, the company posted adjusted earnings per share of $2.80, falling short of analyst expectations of $2.91. Revenue came in at $14.53 billion, below the $14.79 billion consensus, as growth momentum slowed.
The outlook for the current quarter further weighed on sentiment. TD SYNNEX projected Q2 adjusted EPS between $2.45 and $2.95, well below the $3.03 expected by analysts, and revenue in the range of $13.9 billion to $14.7 billion, compared to forecasts of $14.72 billion.
Management pointed to its broad IT portfolio, global scale, and targeted go-to-market strategy as drivers of long-term competitiveness. However, the immediate focus for investors remained on the earnings shortfall and cautious guidance, which signaled a more tepid environment for IT spending in the months ahead.
TD SYNNEX Sinks 16% After Earnings Miss and Weak Q2 Guidance
TD SYNNEX (NYSE:SNX) shares plunged over 16% intra-day today, after the company reported disappointing fiscal first-quarter results and issued underwhelming guidance for Q2, sparking investor concern about near-term performance.
For Q1, the company posted adjusted earnings per share of $2.80, falling short of analyst expectations of $2.91. Revenue came in at $14.53 billion, below the $14.79 billion consensus, as growth momentum slowed.
The outlook for the current quarter further weighed on sentiment. TD SYNNEX projected Q2 adjusted EPS between $2.45 and $2.95, well below the $3.03 expected by analysts, and revenue in the range of $13.9 billion to $14.7 billion, compared to forecasts of $14.72 billion.
Management pointed to its broad IT portfolio, global scale, and targeted go-to-market strategy as drivers of long-term competitiveness. However, the immediate focus for investors remained on the earnings shortfall and cautious guidance, which signaled a more tepid environment for IT spending in the months ahead.
TD SYNNEX Corporation (NYSE:SNX) Analysts' Expectations and Financial Performance
- The consensus price target for TD SYNNEX Corporation (NYSE:SNX) has increased by approximately 10% over the past year, indicating growing confidence in the company's business model and market position.
- Despite a more conservative view from analyst Matthew Sheerin with a price target of $130, the company's recent financial performance, including a 10% year-over-year revenue increase in the fourth quarter of 2024, supports the optimistic sentiment.
- TD SYNNEX's financial health is highlighted by its impressive quarterly free cash flow and reduced restructuring costs, alongside stock repurchases signaling confidence in future financial performance.
TD SYNNEX Corporation (NYSE:SNX) is a prominent player in the IT solutions and business process services sector. The company has been expanding its offerings and capabilities, which is reflected in the positive shift in analysts' expectations. Over the past year, the consensus price target for SNX has increased by approximately 10%, from $141.78 to $156, indicating growing confidence in the company's business model and market position.
Despite the positive outlook, analyst Matthew Sheerin from Stifel Nicolaus has set a lower price target of $130 for SNX. This suggests a more conservative view compared to the consensus. The company's recent financial performance supports the optimistic sentiment, with a 10% year-over-year revenue increase in the fourth quarter of 2024, driven by advancements in solutions and endpoint solutions.
TD SYNNEX's financial health is further bolstered by its impressive quarterly free cash flow and reduced restructuring costs. The company is also engaging in stock repurchases, which often signals confidence in future financial performance. However, potential risks such as new tariffs, dependency on key suppliers like Apple and HP, and low operating margins should be considered by investors.
The company's reliance on international revenue is a crucial factor in assessing its financial stability and growth prospects. This global focus could significantly influence SNX's stock price performance. As TD SYNNEX prepares to release its first-quarter fiscal 2025 results on March 27, 2025, investors and stakeholders should monitor any developments that could impact analysts' price targets and the stock's performance.
