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Why Tech Data Rose 22% Yesterday


Nov. 30 2018, Updated 1:00 p.m. ET

Stock rose on earnings beat

Shares of Tech Data (TECD) rose 22% yesterday to close at $89.89. The company announced its third quarter of fiscal 2019 earnings (for the year ending in January) and reported earnings per share of $3.02, which was 38% above analyst estimates of $2.19 per share. In the third quarter of fiscal 2018, TECD reported earnings of $2.00.

The company reported revenue of $8.92 billion, a fall of 2.3% year-over-year, compared to $9.13 billion in the same period last year. Despite Tech Data’s stellar rise yesterday, the stock has still declined 8.3% this year.

Shares of Tech Data have risen 27.2% this month and 25.6% since the start of October.

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Revenue expected to decline marginally in fiscal 2019

Analysts expect Tech Data’s revenue to decline marginally, by 0.4% to $36.63 billion, in fiscal 2019. It should then rise 2% to $37.36 billion in fiscal 2020. The company’s earnings per share are, however, expected to rise 7.5% to $9.79 in fiscal 2019 and 8.5% to $10.62 in 2020.

The EPS are expected to grow at a compound annual growth rate of 11% over the next five years. Tech Data has a forward price-to-earnings ratio of 11.2x—which doesn’t look too expensive, considering its robust earnings growth.


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