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

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Summary:
Tech Data reported impressive fiscal second-quarter 2015 results. Both earnings and revenues comfortably beat the Zacks Consensus Estimate. We believe that Tech Data will benefit from stabilization in personal computer sales through the rest of calendar year 2014. Tech Data's partnership with Google, Vmware, Cisco and Xerox will drive top-line growth, going forward. Further, the company's improving execution (particularly in Europe), its superior customer service and improving market share in the Americas are the major positives, moving ahead. However, sluggish IT spending will hurt Tech Data's top-line growth in fiscal 2015. Moreover, results will significantly depend on sustaining demand for personal computers, which is a headwind. Thus, we maintain a Neutral recommendation on the stock and set a price target of $60.00.

Overview:

Incorporated in 1974 and based in Clearwater, FL., 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% of sales in 2014, followed by Data Center (servers, server accessories, networking products, storage hardware and networking support services) at 23%, software at 18%, mobility at 9% and consumer electronics at 4%.

Value added resellers contributed 51% 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% of sales), while Europe reported sales of $16.63 billion (62% 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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As of 12/19/2014, 04:15 PM


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