TD SYNNEX has been treading water for the past six months, recording a small return of 2.3% while holding steady at $145.74.
Is now the time to buy TD SYNNEX, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is TD SYNNEX Not Exciting?
We're cautious about TD SYNNEX. Here are three reasons why you should be careful with SNX and a stock we'd rather own.
1. Revenue Growth Flatlining
Long-term growth is the most important, but within business services, a stretched historical view may miss new innovations or demand cycles. TD SYNNEX’s recent performance shows its demand has slowed significantly as its revenue was flat over the last two years. 
2. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for TD SYNNEX, its EPS declined by 1.5% annually over the last five years while its revenue grew by 23%. This tells us the company became less profitable on a per-share basis as it expanded.
3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
TD SYNNEX has shown poor cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.2%, lousy for a business services business.
Final Judgment
TD SYNNEX’s business quality ultimately falls short of our standards. That said, the stock currently trades at 11.6× forward P/E (or $145.74 per share). Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. We’d suggest looking at a top digital advertising platform riding the creator economy.
Stocks We Would Buy Instead of TD SYNNEX
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