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

Zacks Equity Research

Synnex (SNX) closed the most recent trading day at $122.93, moving -0.31% from the previous trading session. This change lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.18%.

Coming into today, shares of the high-tech contractor had gained 3.21% in the past month. In that same time, the Computer and Technology sector gained 4.77%, while the S&P 500 gained 3.89%.

Wall Street will be looking for positivity from SNX as it approaches its next earnings report date. On that day, SNX is projected to report earnings of $3.61 per share, which would represent a year-over-year decline of 1.1%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6 billion, up 6.71% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.61 per share and revenue of $23.18 billion. These totals would mark changes of +15.79% and +15.57%, respectively, from last year.

It is also important to note the 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating 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 #3 (Hold).

Digging into valuation, SNX currently has a Forward P/E ratio of 9.78. This represents a discount compared to its industry's average Forward P/E of 31.15.

Meanwhile, SNX's PEG ratio is currently 0.94. 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. Business - Software Services stocks are, on average, holding a PEG ratio of 2.79 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 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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