Shares of TD SYNNEX (SNX, Financial) experienced a notable decline today, with a price decrease of 12.64%, bringing the stock price to $109.61. The drop came after the company announced subpar first-quarter 2025 results, missing Wall Street's forecasts for sales, operating profits, and earnings. The company's forward guidance also fell short of analysts' expectations.
TD SYNNEX (SNX, Financial), trading on the NYSE, now has a market capitalization of $9.25 billion. The company's Price-to-Earnings (PE) ratio is relatively low at 13.77, suggesting potential undervaluation. Despite the recent drop, the company maintains a GF Value of $117.22, indicating it is currently "Fairly Valued" according to GuruFocus GF Value.
While the company shows some medium and severe warning signs, including a declining operating margin and a faster asset growth rate compared to revenue growth, there are some positive aspects as well. The Altman Z-score of 2.64 is in the grey area, indicating that the company might be under some financial stress, yet not at an immediate risk of bankruptcy.
On the positive side, TD SYNNEX boasts a high Piotroski F-Score of 7, suggesting a strong financial position, and a low Beneish M-Score of -2.58, implying the company is unlikely to be a manipulator. The stock's PE ratio is also near a 1-year low, offering a potentially attractive entry point for investors.
The company's historical revenue growth rates are noteworthy, with a 9.8% increase over the past year and a 14.2% average over the previous five years. However, its operating margin and return on invested capital (ROIC) remain below ideal levels, indicating areas for improvement.
Investors should also be aware of insider activity, as there have been recent insider selling transactions totaling 77,289 shares over the past three months. These sales, combined with no insider purchases, may raise concerns about the stock's immediate prospects.
Despite the recent setbacks, TD SYNNEX remains a significant player in the IT distribution and solutions aggregation sector. The next earnings report, expected on March 27, 2025, will be crucial for investors looking for signs of recovery or further challenges.
