Examining SYNNEX Corporation's (NYSE:SNX) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SNX's latest performance announced on 31 May 2019 and compare these figures to its longer term trend and industry movements.
Could SNX beat the long-term trend and outperform its industry?
SNX's trailing twelve-month earnings (from 31 May 2019) of US$381m has jumped 35% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which SNX is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is only a result of an industry uplift, or if SYNNEX has experienced some company-specific growth.
In terms of returns from investment, SYNNEX has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 4.5% is below the US Electronic industry of 6.8%, indicating SYNNEX's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for SYNNEX’s debt level, has declined over the past 3 years from 13% to 11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 62% to 100% over the past 5 years.
What does this mean?
SYNNEX's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While SYNNEX has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research SYNNEX to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SNX’s future growth? Take a look at our free research report of analyst consensus for SNX’s outlook.
- Financial Health: Are SNX’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 May 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.