Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, BofA Securities analyst Ruplu Bhattacharya adjusted the price target for Ingram Micro (NYSE: INGM) to $28.00, down from the previous $28.00, while maintaining a Buy rating on the company’s stock. According to InvestingPro data, the stock, currently trading at $19.11, appears undervalued compared to its Fair Value, with analyst targets ranging from $22 to $30. This prominent player in the Electronic Equipment industry commands a market capitalization of $4.93 billion. The revision followed Ingram Micro’s disclosure of its fourth fiscal quarter 2024 earnings, which surpassed Street revenue and earnings per share (EPS) estimates. However, the company provided a cautious forecast for the first fiscal quarter, projecting revenues of $11.6 billion and EPS of $0.56 at the midpoint, along with a gross profit (GP) of $810 million, indicating gross margins (GMs) of approximately 7%, consistent quarter over quarter.
Ingram Micro experienced robust growth among large and enterprise customers, which helped counterbalance softer performance from small and medium business (SMB) and public sector clients. Despite year-over-year declines in overall gross margins by 50 basis points, the company noted several factors influencing this trend, including a greater proportion of sales to U.S. enterprise customers, who typically have a lower rate of attaching services, as well as robust client and endpoint solutions, increased revenue contributions from the Asia-Pacific region, and competitive project pricing in India. InvestingPro analysis reveals that weak gross profit margins, currently at 7.32%, remain a challenge, with 8 additional ProTips available to subscribers.
Management highlighted that the current gross margin dynamics might persist in the short term, as SMB demand remains subdued and client and endpoint solution sales grow due to PC refresh cycles, a segment known for lower margins. BofA Securities reaffirmed their Buy rating, citing positive developments in client and endpoint solutions, advanced solutions such as server, storage, and networking, and continued strength in cloud services. InvestingPro’s comprehensive analysis shows the company maintains a FAIR Financial Health Score of 2.21/5, with detailed insights available in the Pro Research Report, which offers deep-dive analysis of 1,400+ US stocks.
In other recent news, Ingram Micro reported its fourth-quarter 2024 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.92 and revenue of $13.34 billion. The company’s revenue increased by 2.5% year-over-year, reflecting strong performance in North America and the Asia-Pacific region. Despite this positive outcome, Evercore ISI analyst Amit Daryanani adjusted the company’s stock target to $26, maintaining an In Line rating, following the company’s December quarter results. Ingram Micro’s revenue growth was driven by notable strength in servers and storage products, although networking products faced challenges. Looking ahead, the company provided guidance for the first quarter of 2025, with expected net sales between $11.43 billion and $11.83 billion, indicating a 2.6% growth at the midpoint. However, the EPS guidance of $0.51 to $0.61 fell short of the expected $0.67, attributed to competitive pressures and shifts in product mix. Daryanani anticipates potential growth acceleration and margin expansion for Ingram Micro as 2025 progresses.
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