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Category: Stock Market and Tech Data
Date: 3 December 2019 Stock Price: $143.87 We take a look at the 3rd quarter of their 2020 fiscal year earnings report of Tech Data a next generation technology services ad solutions provider serving over 125 000 customers across the world.
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About Tech Data
Tech Data connects the world with the power of technology. Our end-to-end portfolio of products, services and solutions, highly specialized skills, and expertise in next-generation technologies enable channel partners to bring to market the products and solutions the world needs to connect, grow and advance. Tech Data is ranked No. 88 on the Fortune 500® and has been named one of Fortune’s World’s Most Admired Companies for 10 straight years.
Overview of Tech Data's 3rd quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $9.118 billion (down from $9.340 billion for the same quarter in the previous year)
- Net sales decreased by -2.4% over the last 12 months
- Cost of products sold: $8.558 billion (down from $8.773 billion for the same quarter in the previous year)
- Cost of products sold decreased by -2.5% over the last 12 months
- Net earnings: $90.770 million (down from $114.416 million for the same quarter in the previous year)
- Diluted earnings per share: $2.52 (up from $2.96 for the same quarter in the previous year)
- PE ratio of Tech Data: 17.5
- Diluted number of shares in issue: 35.968 million (down from 38.526 million for the same quarter of the previous year)
- Cash and equivalents: $964.146 million
- Cash and equivalents per share: $26.80
- Cash and equivalents makes up 18.6% of Tech Data' current market capital
- Cash and equivalents makes up 7.6% of Tech Data' total assets
- Inventories: $3.145 billion
- Inventories makes up 24.8% of Tech Data' total assets
- Stockholders equity in Tech Data: $2.968 billion
- Stockholders equity per share in Tech Data: $82.51
- Tech Data is trading at 1.74 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
Tech Data's management commentary on their 3rd quarter 2020 earnings
CLEARWATER, Fla.--(BUSINESS WIRE)-- Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the third quarter ended October 31, 2019.
“We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimization actions,” said Rich Hume, chief executive officer. “In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies.”
“We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimization actions,” said Rich Hume, chief executive officer. “In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies.”
- Worldwide net sales were $9.1 billion, a decrease of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales were flat.
- Americas: Net sales were $4.2 billion, an increase of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 2 percent.
- Europe: Net sales were $4.6 billion, a decrease of 6 percent compared to the prior-year quarter. On a constant currency basis, net sales decreased 2 percent.
- Asia Pacific: Net sales were $0.3 billion, an increase of 4 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 4 percent.
- Three vendors represented 10 percent or more of worldwide net sales: Apple Inc. 17%; Cisco Systems 11%; and HP Inc. 10%.
- Net cash generated by operations during the quarter was $310 million. The cash conversion cycle improved by one day to 17 days, compared to the year-ago period.
- At October 31, 2019, the company had approximately $1.6 billion of goodwill and acquired intangibles.
- Return on invested capital for the trailing twelve months was 12 percent, compared to 8 percent in the prior year. Adjusted return on invested capital for the trailing twelve months was 15 percent, compared to 12 percent in the year-ago period.
- In the quarter, the company repurchased 518,433 shares for $49 million at an average purchase price of $95.09 per share. In connection with the subsequent events described below, the company has suspended its share repurchase program.
Tech Data (NASDAQ: TECD) stock price history
The image below, obtained from Google, shows the stock price history of Tech Data over the last 5 years. And its been a pretty volatile but largely positive time for Tech Data stockholders The group's stock traded at around $63.10 a stock 5 years ago and is currently trading at $143.87 a stock. That's a significant return of 128% provided to Tech Data stockholders over the last 5 years.
Tech Data's stock is trading at a lot closer to its 52 week high of $145.25 than it is to its 52 week low of $74.16 which to us is a clear indication that the short term momentum and sentiment of Tech Data's stock is very positive.
Tech Data's stock is trading at a lot closer to its 52 week high of $145.25 than it is to its 52 week low of $74.16 which to us is a clear indication that the short term momentum and sentiment of Tech Data's stock is very positive.
Recent coverage of Tech Data
The extract below discusses the latest regarding Tech Data as obtained from TheStreet.com
Tech Data (Nasdaq: TECD) today announced it has completed its acquisition of DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. DLT Solutions is now a wholly owned subsidiary of Tech Data and complements the company's existing public sector business with additional expertise and resources to accelerate growth and streamline existing complexities for channel partners serving the U.S. public sector space. "We are excited to welcome DLT Solutions to Tech Data and are confident that this acquisition will provide higher-value solution offerings to our partners, helping them to build their businesses while advancing our strategy and footprint in the U.S. public sector marketplace," said Joe Quaglia, president, Americas, Tech Data. "With this transaction now complete, Tech Data will be able to provide an even greater level of sales enablement and proactive opportunity development for our channel partners." Through the combination of Tech Data and DLT Solutions, channel partners will have access to a broader portfolio of leading technologies, an extensive array of in-house public sector contract vehicles, and dedicated channel and enablement services. DLT also bolsters Tech Data's technology expertise across six core areas: Application Lifecycle, Big Data and Analytics, Business Applications, Cloud Computing, Cybersecurity, and IT Infrastructure
Tech Data (Nasdaq: TECD) today announced it has completed its acquisition of DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. DLT Solutions is now a wholly owned subsidiary of Tech Data and complements the company's existing public sector business with additional expertise and resources to accelerate growth and streamline existing complexities for channel partners serving the U.S. public sector space. "We are excited to welcome DLT Solutions to Tech Data and are confident that this acquisition will provide higher-value solution offerings to our partners, helping them to build their businesses while advancing our strategy and footprint in the U.S. public sector marketplace," said Joe Quaglia, president, Americas, Tech Data. "With this transaction now complete, Tech Data will be able to provide an even greater level of sales enablement and proactive opportunity development for our channel partners." Through the combination of Tech Data and DLT Solutions, channel partners will have access to a broader portfolio of leading technologies, an extensive array of in-house public sector contract vehicles, and dedicated channel and enablement services. DLT also bolsters Tech Data's technology expertise across six core areas: Application Lifecycle, Big Data and Analytics, Business Applications, Cloud Computing, Cybersecurity, and IT Infrastructure
Tech Data (NASDAQ: TECD) latest stock valuation
So what do we value Tech Data stock at based on their latest earnings release? Based on Tech Data's latest earnings report our valuation model provides a target price (full value price) for Tech Data stock at $131.40 a stock. We therefore believe the stock of Tech Data is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $131.40. A good entry point into Tech Data would therefore be at $118.30 or below.
We expect the stock of Tech Data to pull back from its current price in coming weeks and months to levels closer to our target price (full value) price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $131.40. A good entry point into Tech Data would therefore be at $118.30 or below.
We expect the stock of Tech Data to pull back from its current price in coming weeks and months to levels closer to our target price (full value) price.
Next earnings release of Tech Data
It is expected that Tech Data will release their 4th quarter and full fiscal 2020 earnings report in late February 2020