A month has gone by since the last earnings report for Tech Data Corporation (NASDAQ:TECD) . Shares have lost about 3.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Tech Data Q4 Earnings Beat Estimates, Revenues Miss
Tech Data reported fourth-quarter fiscal 2017 results wherein non-GAAP earnings of $2.45 per share beat the Zacks Consensus Estimate by $0.27. However, revenues of $7.43 billion missed the consensus mark of $7.52 billion. On a year-over-year basis, earnings were up almost 7% while revenues declined nearly 0.8%. On a constant currency basis, revenues grew 2%.
Despite an overall weaker-than-expected demand environment, cost control measures helped the company to post stellar earnings.
Revenues from the Americas (36.5% of revenues) were flat at $2.71 billion, while the same from Europe (63.6%) was down 1.34% to $4.72 billion on a year-over-year basis.
The company’s gross profit in the quarter was $371 million, which grew 4.6% from the year-ago quarter.
Non-GAAP selling, general & administrative (SG&A) expenses were up 4.6% year over year to almost $249 million in the reported quarter. As a percentage of revenues, SG&A expenses were 3.35% compared with 3.18% in the year-ago quarter.
Non-GAAP operating income grew 3.4% year over year to $127.2 million. Non-GAAP operating margin was 1.71% as compared with 1.64% in the year-ago quarter.
Geographically, non-GAAP operating income decreased 46.59% in the Americas and 11.13% year over year in Europe.
Balance Sheet and Cash Flow
At the end of the quarter, Tech Data had approximately $2.13 billion in cash and cash equivalents compared with $691.6 million as of Jan 31, 2016. In the quarter, cash provided by operations was $445 million.
Outlook
Tech Data didn’t provide first-quarter fiscal 2018 guidance due to the time constrain between the fourth-quarter results and the completion of Avnet’s Technology solutions business, which was completed recently.
Following the completion of the acquisition management targets cost savings of almost $50 million in first year and $100 million in the second year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
Tech Data Corporation Price and Consensus
Tech Data Corporation Price and Consensus | Tech Data Corporation Quote
VGM Scores
At this time, Tech Data's stock has a great Growth Score of 'A', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value, momentum and growth investors.
Outlook
The stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.
Tech Data Corporation (TECD): Free Stock Analysis Report
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