SYNNEX is estimated to report earnings of $2.91 a share on revenue of $15.8bn tomorrow. Currently, its stock is trading at $99.26 a share.

Overview

Synnex sells goods and related logistical services; it was first established as a distributor of technological hardware. It collaborates with manufacturers and distributors of networking hardware, software, peripherals, and IT systems as a business process outsourcing and contract assembly company.

Financials

In the financial year ending on the 30^th of November 2021, the company reported revenue of $31.6bn and a gross profit of $1.9bn. Both figures grew year-on-year compared to the 2020 financial year. However, net income fell to $395m from $529m as there was a significant rise in operating expenses, and in 2020 the company generated an additional $194m worth of income from discontinued operations. As a result, earnings per share fell by 38% to $6.28. Looking at the balance sheet, cash-on-hand remains strong and still around the $1bn region. Total assets grew to $27.6bn from $13.5bn and total liabilities rose to $19.8bn from $9.1bn, this led to a positive increase of 82% in equity YOY.

Technicals

Synnex is estimated to report earnings of $2.91 per share and a 1.3% year-on-year increase in revenue to $15.8bn. A positive/negative report could influence the price of its stock value. The stock is currently trading at $99.26 a share, towards the upside, minor resistance sits at $99.50 followed by further levels at $100.81 then at $101.20. A break above these levels could see its price hike towards the key area of $103-$104 (upper trendline of the channel as shown on the chart). On the other hand, towards the downside, support sits at $98.87 then at $98.07 then at $97.30. A break below these levels may see the price of the stock slide towards $95-$96 a share. Looking at the indicators, MACD is currently positive and so is RSI as it reads 64.

Summary

On the basis of the financials of the company, revenue and profit continue to grow year-on-year and if Synnex can manage to reduce its operating expenses moving forward, it should start seeing gradual increases in its net income. In this area of the business that is the main negative as its balance sheet is healthy with a strong cash-on-hand pile, and its total assets overshadow its total liabilities providing more financial security. Based on the technical aspect, the stock is currently suggesting a bullish stance and there is potential for further upside, providing the earnings report tomorrow is better than expected. Note to investors: A negative report may result in a drop in price.