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

Zacks Equity Research

Synnex (SNX) closed at $141.73 in the latest trading session, marking a +0.15% move from the prior day. The stock lagged the S&P 500's daily gain of 1.13%. Meanwhile, the Dow gained 1.68%, and the Nasdaq, a tech-heavy index, added 0.43%.

Heading into today, shares of the high-tech contractor had gained 11.12% over the past month, outpacing the Computer and Technology sector's gain of 5.2% and the S&P 500's gain of 2.1% in that time.

Investors will be hoping for strength from SNX as it approaches its next earnings release. On that day, SNX is projected to report earnings of $3.14 per share, which would represent year-over-year growth of 10.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.39 billion, up 2.71% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.97 per share and revenue of $23.01 billion. These totals would mark changes of +5.35% and -3.14%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for SNX. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 5.89% higher. SNX is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, SNX is currently trading at a Forward P/E ratio of 10.13. This represents a discount compared to its industry's average Forward P/E of 31.22.

It is also worth noting that SNX currently has a PEG ratio of 0.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Business - Software Services was holding an average PEG ratio of 2.75 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 23, putting it in the top 10% 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.

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


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