Synchronoss (SNCR) Completes Transition to Cloud-Only Business
Synchronoss Technology SNCR recently announced that it has completed its transformation into a cloud-only business.
As part of the transformation, Synchronoss sold its Messaging and NeworkX segment to Lumine Group in November 2023, eliminating $10 million to $15 million of stranded and other costs to improve the company’s cost profile.
Following the removal of restructuring-related charges and some stranded costs, Synchronoss forecasts revenue growth between 5% and 8% for 2024, gross margin of more than 75%, and adjusted EBITDA margin greater than 25%.
The company anticipates a considerable increase in cash flow generation in 2024, resulting in overall business growth, improved corporate gross margins, and a $15 million reduction in annual operating expenses.
The company expects to generate positive trends in revenues and free cash flows with the establishment of long-term contracts with its present and future customers.
Synchronoss Technologies, Inc. Price and Consensus
Synchronoss Technologies, Inc. price-consensus-chart | Synchronoss Technologies, Inc. Quote
Synchronoss' Strong Portfolio Boosts Growth Prospects
Synchronoss is benefiting from an expanding partner base and customer base, driven by strong demand for its cloud-based solutions.
The company’s strong portfolio is helping it win market share in the cloud-based software domain.
Synchronoss aims to strengthen the foundation of its cloud-only business.
The company recently collaborated with Soft Bank to expand its footprint in Asia. The partnership will aid in expanding the storage capacity of SoftBank’s Anshin Data Box to 500 gigabytes per month.
Recently, the company launched SpatialNX 9.0, the latest version of SpatialNX, which combines PostgreSQL, to deliver a strong, open-source object-relational database system that is reliable and robust.
The cloud business's strong tailwinds and operating momentum are projected to make Synchronoss well-positioned for long-term growth and profitability.
Outlook Moderate
For the fourth quarter of 2023, Synchronoss expects GAAP revenues between $40 million and $42 million.
The Zacks Consensus Estimate for Synchronoss’ revenues for the fourth quarter of 2023 is pegged at $43.76 million, indicating a decline of 29% year over year.
The Zacks Consensus Estimate for the bottom line is pegged at a loss of 9 cents per share, indicating improvement of 87.5% year over year.
For fiscal 2023, Synchronoss expects GAAP revenues between $162 million and $164 million.
The Zacks Consensus Estimate for fiscal 2023 revenues is pegged at $216.83 million, indicating a decline of 14.2% year over year.
Zacks Rank & Stocks to Consider
Currently, Synchronoss carries a Zacks Rank #3 (Hold).
In the past month, the company’s shares have declined 11.5% against the Zacks Computer & Technology sector’s rise of 2.4%.
Some better-ranked stocks in the broader technology sector are Flex FLEX, Badger Meter BMI, and NetEase NTES, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Flex shares have gained 21.8% in the year-to-date period. Flex’s long-term earnings growth rate is currently projected at 12.9%.
Badger Meter’s shares have gained 39.2% in the year-to-date period. Badger Meter’s long-term earnings growth rate is currently projected at 20.4%.
NetEase shares have gained 46.9% in the year-to-date period. NetEase's long-term earnings growth rate is currently projected at 15.9%.
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