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Synnex (SNX) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Synnex (SNX) closed at $99.90, marking a +0.14% move from the previous day. This change lagged the S&P 500's 0.58% gain on the day. At the same time, the Dow added 0.45%, and the tech-heavy Nasdaq gained 1.13%.

Coming into today, shares of the high-tech contractor had lost 7.08% in the past month. In that same time, the Computer and Technology sector lost 4.08%, while the S&P 500 lost 2.34%.

SNX will be looking to display strength as it nears its next earnings release. In that report, analysts expect SNX to post earnings of $2.71 per share. This would mark year-over-year growth of 13.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.53 billion, up 11.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.91 per share and revenue of $22.21 billion. These totals would mark changes of +9.37% and +10.75%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for SNX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.15% higher. SNX is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that SNX has a Forward P/E ratio of 8.38 right now. This represents a discount compared to its industry's average Forward P/E of 33.91.

Investors should also note that SNX has a PEG ratio of 0.7 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Business - Software Services was holding an average PEG ratio of 2.52 at yesterday's closing price.

The Business - Software Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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