Investment Thesis
Despite 6.9% revenue growth and positive net income of $661M, TD SYNNEX exhibits critically concerning fundamentals with negative operating cash flow of -$1.2B, indicating severe working capital deterioration. Razor-thin net margins of 1.8% provide no buffer for error, and the 0.64x quick ratio signals emerging liquidity stress in a high-leverage business structure.
Strengths
- Revenue growth of 6.9% YoY demonstrates market share gains in wholesale distribution
- Strong interest coverage of 13.4x confirms ability to service $3.6B debt load
- Moderate leverage with 0.40x debt-to-equity ratio is structurally sustainable
Risks
- Negative operating cash flow of -$1.2B despite profitability indicates major working capital problems and poor earnings quality
- Quick ratio of 0.64x signals insufficient liquid assets relative to short-term obligations and potential refinancing risk
- Net profit margins of 1.8% leave zero tolerance for revenue disruptions or cost pressures in this cyclical wholesale sector
Key Metrics to Watch
- Operating cash flow trajectory - must return to positive to validate sustainability
- Working capital metrics (days inventory, receivables aging, payables)
- Cash position and liquidity ratios - current $1.1B cash is critically low
- Gross margin stability amid competitive distribution pressures
Financial Metrics
Revenue
36.7B
Net Income
661.0M
EPS (Diluted)
$8.19
Free Cash Flow
-1.3B
Total Assets
38.5B
Cash
1.1B
Profitability Ratios
Gross Margin
7.1%
Operating Margin
2.7%
Net Margin
1.8%
ROE
7.4%
ROA
1.7%
FCF Margin
-3.4%
Balance Sheet & Liquidity
Current Ratio
1.20x
Quick Ratio
0.64x
Debt/Equity
0.40x
Debt/Assets
76.8%
Interest Coverage
13.40x
Long-term Debt
3.6B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-08-01T06:10:30.661329 |
Data as of: 2026-05-31 |
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