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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 $86.41, marking a +1.81% move from the previous day. This move lagged the S&P 500's daily gain of 1.88%. At the same time, the Dow added 1.43%, and the tech-heavy Nasdaq gained 2.24%.

Prior to today's trading, shares of the high-tech contractor had lost 11.68% over the past month. This has lagged the Computer and Technology sector's loss of 2.84% and the S&P 500's loss of 3.48% in that time.

SNX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.86, up 11.28% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.68 billion, up 15.72% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.10 per share and revenue of $22.57 billion. These totals would mark changes of +11.11% and +12.56%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for SNX. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SNX currently has a Zacks Rank of #2 (Buy).

In terms of valuation, SNX is currently trading at a Forward P/E ratio of 7.01. This represents a discount compared to its industry's average Forward P/E of 34.03.

Also, we should mention that SNX has a PEG ratio of 0.58. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Business - Software Services stocks are, on average, holding a PEG ratio of 2.5 based on yesterday's closing prices.

The Business - Software Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 93, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNX in the coming trading sessions, be sure to utilize Zacks.com.


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