SYNNEX Corporation distributes a broad range of information technology systems and products, and also provides systems design and integration services. The Concentrix segment offers a portfolio of end-to-end outsourced services around process optimization, customer engagement strategy and back-office automation to clients in ten identified industry verticals. The company was founded in 1980 and is based in Fremont, California.
SNX Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Synnex Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Synnex Corp ranked in the 72th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Synnex Corp ended up being:
The company's balance sheet shows it gets 66% of its capital from equity, and 34% of its capital from debt. Notably, its equity weight is greater than merely 15.96% of US equities in the Technology sector yielding a positive free cash flow.
Synnex Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 11.57% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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Synnex ([[SNX]] +12.1%) reports Q2 revenue decrease of 3.3% Y/Y to $5.53B.Q2 overall margins: Gross declined 104 bps to 11.17%; Operating declined 103 bps to 2.02%; adj. operating declined 134 bps to 2.92% & adj. EBITDA declined 137 bps to 3.57%.Debt to adj. EBITDA leverage ratio declined 90 bps to 2.4%.Return on invested capital was up 50 bps to...