Specific to the PC ecosystem, we remain cautiously optimistic given the opportunities in the commercial space with the Windows 11 refresh cycles and upgrade for advanced security features, offset by some moderation in the consumer segment. SNX is boasting a stronger product portfolio, widening global operations to serve its identified mega markets, and its sustainable top line growth is enough to offset PC cycle. The management continues to provide a strong outlook on its international revenue with its growing footprint and opportunity to realize in Japan and Asia Pacific region. SNX: Annual Estimates Revisions () Reassurance Continues On the brighter side, analysts continue to be positive about SNX’s future with 7 upward revisions in both top line and earnings per share as shown in the image below. However, given the uncertainties associated with increasing global military budgets, such as what the US is currently doing, President Biden increasing US's defense budget by $17 billion in 2023, this theoretically may imply a slower pace of investment spending in areas such as in Information Technology. The management also reassures its investors that they are noticing a continuation of digital transformation and according to this article, they are seeing an increase in IT spending of 5.1% in 2022. And the enterprise space did well as corporations prioritize infrastructure and security projects. The management is very confident and provided a strong outlook with its international demand environment as quoted below.Īll 3 geographic regions performed well. It outgrew its peer Ingram Micro and is now leading the industry, boasting outstanding international revenue growth in Q4 2021 amounting to $11,690.7 million compared to $4,709.6 million last year before the merger. One of the strengths of SNX is its improving skin on IT trends, thanks to its meaningful merger with Tech Data. SNX: Key Growth Trends (Q4 2021 Investor Presentation) A Strong Portfolio During Uncertain Times Additionally, SNX has successfully mitigated customer concentration risk and maintained control over PC cycle dependency, and is currently trading at a trailing P/S of 0.21x and a forward P/S of 17x, making it an attractive buy on a pullback ahead of its Q1 2022 earnings report. SNX maintains a positive outlook, citing a strong demand environment across all geographic regions, enhancing its security and data center offerings, and generating outstanding revenue growth outside the US. It continues to strengthen its global presence as it currently provides services in over 100 countries, has a 150,000 reseller base, and have increased its full-time employees to 22,000 globally. SNX has grown to become the world's largest IT distributor, providing integration services for the IT ecosystem. After the successful spinoff of its customer experience service business, Concentrix in 2020, the company had a meaningful M&A in 2021 with Tech Data. They made it into the Fortune 200 and was ranked as high as 117 in 2021. It began as a distributor of computer hardware products, but eventually evolved and has grown its portfolio and is strategically positioned to cater mega trends. TD SYNNEX Corporation (NYSE: NYSE: SNX) was founded in 1980 and has been in business for over 42 years. JHVEPhoto/iStock Editorial via Getty Images
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