TD SYNNEX (SNX): Valuation Insights After Wave of Positive Analyst Ratings and Upbeat Earnings Forecasts

TD SYNNEX is back in the spotlight this week after a fresh wave of analyst reports reaffirmed their positive outlook on the company ahead of the next earnings announcement. The recurring thread is strong 'Outperform' ratings and not a single sell recommendation in sight. Add to that upbeat forecasts for revenue growth and earnings tracking firmly within management’s guidance, and it is no wonder investor sentiment on TD SYNNEX is on the rise.

This renewed market confidence builds on a run of steady momentum for TD SYNNEX over the past year. Shares are up nearly 30% since last year, outpacing many peers and reflecting the company’s growing scale since its merger with Tech Data. While there have been a few minor pullbacks, the trajectory has remained positive, supported by healthy annual revenue and net income growth.

All of this leads to a familiar crossroads: is this grounds for a closer look based on valuation, or has the market already priced in all that future growth?

Most Popular Narrative: 4.0% Undervalued

The prevailing view among analysts is that TD SYNNEX offers slight undervaluation, with consensus numbers pointing to moderate upside potential from current prices.

The continued enterprise-wide digital transformation and AI adoption, highlighted by double-digit growth in software (especially in cloud, cybersecurity, virtualization, and infrastructure software), is extending TD SYNNEX's addressable market and generating higher recurring revenue streams. This is likely to drive consistent revenue and margin expansion.

What if the backbone of TD SYNNEX’s appeal is built on a high conviction upgrade cycle, aggressive growth projections, and margin expansion that is seldom seen in this sector? The intricate recipe for this valuation hinges on a delicate balance of growth, profitability, and a discounted view of future earnings you won’t want to miss. Discover the detailed quantitative projections and the single assumption that could turn this stock from underdog to outlier.

Result: Fair Value of $158.27 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including potential revenue pullbacks from advanced customer purchases and persistent margin pressures. Both of these factors could challenge TD SYNNEX’s growth story.

Find out about the key risks to this TD SYNNEX narrative.

Another View: SWS DCF Model Perspective

Taking a step back from analyst targets, the SWS DCF model paints an intriguing picture of TD SYNNEX’s value. While both methods see upside, the DCF approach suggests there is even more potential beneath the surface. Which view will the market trust?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TD SYNNEX for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own TD SYNNEX Narrative

If you see things differently or want to dig into the numbers yourself, you can craft a narrative tailored to your research in just a few minutes using Do it your way.

A great starting point for your TD SYNNEX research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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