Shares of Synnex Corp. gained 4.2% in the extended trading session on Tuesday after the company reported better-than-expected 3Q results and issued strong 4Q guidance.
Synnex’s (SNX) 3Q revenues increased 4.2% to $6.47 billion year-on-year and surpassed analysts’ expectations of $5.72 billion. The business process services provider’s adjusted EPS of $3.33 came way higher than the Street consensus of $2.31 and marked an improvement from the year-ago quarter’s earnings of $3.30.
Synnex’s CEO Dennis Polk said, “Our strong third quarter performance is a reflection of our resiliency, our ongoing focus on serving our partners and clients and the continued dedication of our associates on the growth and improvement of our business during these unprecedented times.” (See SNX stock analysis on TipRanks).
Buoyed by solid quarterly results, the company now expects revenues of between $6.45 billion and $6.65 billion, compared with analysts’ projections of $6.07 billion. Its adjusted EPS guidance range of $3.68-$3.93 exceeds Street estimates of $3.30.
Ahead of its 3Q results, Barrington Research analyst Vincent Colicchio reiterated his Buy rating on the stock with a price target of $125 (5.6% downside potential). In a note to investors on Sept. 29, Colicchio wrote, “We expect the company to gain share in the technology distribution and customer engagement services (CES) markets over the next few years due to its competitive advantages.”
Overall, the Street has a cautiously optimistic outlook on the stock with a Moderate Buy analyst consensus. The average price target of $125 implies downside potential of 5.6% to current levels. Shares are up nearly 3% year-to-date.