Synnex Corporation (SNX) Earnings Analysis

SNX Pre-earnings Analysis

Chart done on daily timeframe. Synnex Corporation is set to release its earnings this week. Investors will be excited to hear about Destination AI, which is the company’s artificial intelligence analytics system. Synnex does business with company’s such as AMD, Nvidia, Oracle, Google…etc., many of which have shown substantial growth over the past year; however SNX’s revenue has not reflected that same growth. The company’s year over year revenue fell by about 8%, which could be attributed to higher interest rates and geopolitical pressures. Overall their revenue has still grown more than 100% to 58B in the last four years so a small slowdown is reasonable, but these earnings will be critical as they could set the stage for the year. Synnex beat profit estimates on three out of the last four quarters, expectations for this quarter aren’t too high so they will likely come in line. Analysts see profits coming in at 2.71 per share compared to last quarter’s 2.98 performance.

Looking at its valuation, SNX is trading at a price to earnings of about 16, placing it on the cheaper side of the current average technology P/E. In market where many stocks are overvalued, investors are looking for companies like this to add to their portfolios for the fairly new year, but it depends on their earnings statement. Buyers will be focused on revenue guidance, they want to see growth, and profitability. Of course artificial intelligence will be a big topic too. 

Option chain analysis:

SNX is a low volume stock which means it doesn’t get that much attention. Its nearest option chain expiration is on April 19th, 2024 and it currently reflects an implied volatility reading of 33.83%, which translates to about a $7.50 move. The direction of the move will be dependent on how buyers and sellers react to their earnings.