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Synnex (SNX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Synnex (SNX) closed at $107.63 in the latest trading session, marking a +1.2% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.96%. At the same time, the Dow added 0.75%, and the tech-heavy Nasdaq gained 1.58%.

Heading into today, shares of the high-tech contractor had gained 3.82% over the past month, outpacing the Computer and Technology sector's gain of 2.37% and the S&P 500's gain of 1.85% in that time.

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, our latest consensus estimate is calling for revenue of $5.53 billion, up 11.26% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.91 per share and revenue of $22.21 billion, which would represent changes of +9.37% and +10.75%, respectively, from the prior year.

Any recent changes to analyst estimates for SNX should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. The Zacks Consensus EPS estimate has moved 0.14% higher within the past month. SNX is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note SNX's current valuation metrics, including its Forward P/E ratio of 8.93. This represents a discount compared to its industry's average Forward P/E of 35.74.

Meanwhile, SNX's PEG ratio is currently 0.74. 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. SNX's industry had an average PEG ratio of 3.57 as of yesterday's close.

The Business - Software Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 20, which puts it in the top 8% 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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