NEW YORK (TheStreet) -- Shares of Synnex Corp. (SNX) are down -6.44% to $69.71 on very heavy trading volume after the business process services firm said last night that it expects adjusted third quarter earnings of $1.45 to $1.50 a share on revenue of $3.3 billion to $3.4 billion.
Analysts forecast $1.53 a share on revenue of $3.29 billion.
Despite that adjustment, the company reported adjusted second quarter earnings of $1.52 on revenue of $3.45 billion.
Analysts surveyed by FactSet estimated $1.37 a share on revenue of $3.17 billion.
This morning, Citigroup (C) said Synnex continues to be its top small cap pick, attributing the current sell off to the company's conservative outlook.
The bank is maintaining its "buy" rating on the stock with an $85 price target.
Separately, TheStreet Ratings team rates SYNNEX CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYNNEX CORP (SNX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 23.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 73.91% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SYNNEX CORP has improved earnings per share by 14.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYNNEX CORP reported lower earnings of $2.98 versus $4.01 in the prior year. This year, the market expects an improvement in earnings ($5.92 versus $2.98).
- The net income growth from the same quarter one year ago has exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 15.1% when compared to the same quarter one year prior, going from $33.37 million to $38.42 million.
- You can view the full analysis from the report here: SNX Ratings Report