Tech Data Earnings Preview

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After beating estimates last quarter by 15 cents, Tech Data (NAS: TECD) has set the standard for itself. The company will unveil its latest earnings on Monday, Nov. 21. Tech Data is a distributor of information technology (IT) products, logistics management, and other value-added services worldwide.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Tech Data, with four of six analysts rating it hold. Analysts don't like Tech Data as much as competitor Ingram Micro overall. Four out of nine analysts rate Ingram Micro a buy compared to two out of six for Tech Data. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $6.74 billion in revenue this quarter. That would represent a rise of 9.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.27 per share. Estimates range from $1.20 to $1.40.

What our community says:
CAPS All-Stars are solidly behind the stock, with 91.4% awarding it an outperform rating. The community at large agrees with the All-Stars, with 88.8% assigning it a rating of outperform. Fools are gung-ho about Tech Data, though the message boards have been quiet lately, with only 54 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for Tech Data is a bit more pessimistic than the community assessment.

Management:
Tech Data's profit has risen year over year by an average of 14.2% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

5.3%

5.3%

5.3%

5.3%

Operating Margin

1.2%

1.2%

1.7%

1.3%

Net Margin

0.8%

0.8%

1.1%

0.8%

One final thing: If you want to keep tabs on Tech Data movements, and for more analysis on the company, make sure you add it to your Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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