Tech Data Corporation (TECD): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Tech Data reported better-than-expected fourth-quarter 2014. Earnings of $2.10 per share beat the Zacks Consensus Estimate by $0.15. Tech Data's revenues of $7.97 billion were almost in line with the Zacks Consensus Estimate. We believe that sluggish PC shipments will hurt Tech Data's top-line growth in fiscal 2015. The company's growing exposure to volatile European markets remains a concern. Moreover, its back-end loaded guidance will remain a headwind in fiscal 2015. Nevertheless, positive guidance will give some momentum to the stock. The completion of the SAP implementation will improve execution. Its partnership with Google will drive top-line growth, going forward. Further, Tech Data's improving execution (particularly in Europe), superior customer service and improving market share in the Americas are the major positives, going ahead. Thus, we maintain a Neutral recommendation and set a price target of $66.00.

Overview:

Incorporated in 1974 and based in Clearwater, Fla., Tech Data Corporation (TECD) is one of the leading wholesale distributors of information technology (IT) products, logistics management and other value-added services. The company distributes and markets more than 150,000 products from more than 600 manufacturers and publishers.

Broadline (notebooks, tablets, desktop systems, printers, supplies and components) products accounted for 46.0% of sales in 2014, followed by Data Center (servers, server accessories, networking products, storage hardware and networking support services) at 23.0%, software at 18.0%, mobility at 9.0% and consumer electronics at 4.0%.

Value added resellers contributed 51.0% of sales, direct marketers & retailers 28.0% and corporate resellers 21.0% of sales in fiscal 2014. The company generated approximately 21.0% of sales in fiscal 2014 from products purchased from Hewlett-Packard.

Tech Data reported revenues of $26.82 billion in 2014. The company sells products in more than 100 countries and generates revenues primarily from two geographical segments: the Americas (including North and Latin America) and Europe. In fiscal 2014, the Americas segment reported sales of $10.19 billion (38.0% of sales), while Europe reported sales of $16.63 billion (62.0% of sales).

Tech Data faces significant competition from Ingram Micro Inc., Synnex Corp., Arrow Electronics Inc. and Avnet, Inc. along with some regional and local distributors.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: TECD , IT

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