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On Wednesday, Evercore ISI analyst Amit Daryanani reduced the price target for Ingram Micro (NYSE: INGM) to $26 from the previous $27, while maintaining an In Line rating for the company’s shares. According to InvestingPro data, the stock appears undervalued at its current price of $20.98, with analyst targets ranging from $23 to $33. Daryanani’s analysis followed Ingram Micro’s December quarter results, which slightly surpassed Wall Street’s expectations with revenues of $13.34 billion and earnings per share (EPS) of $0.92, compared to the anticipated $13.2 billion and $0.91 respectively.
The revenue growth of approximately 3% in the December quarter was attributed to strong performance in North America, with a 4% increase representing 35% of sales, and the Asia-Pacific region, which saw an 8% rise accounting for 27% of sales. These gains were partially offset by slight declines in Europe, the Middle East, and Africa (EMEA), as well as Latin America, each down by 1% year over year. As a prominent player in the Electronic Equipment industry with annual revenue of $47.7 billion, InvestingPro analysis reveals the company maintains a fair overall financial health score despite operating with significant debt levels.
Ingram Micro observed notable strength in its servers and storage products, both of which experienced double-digit growth. The company also reported robust growth in client devices, spurred by the PC upgrade cycle. Conversely, networking products faced challenges and saw a double-digit decline.
The company provided guidance for a mixed March quarter, with sales projected to increase by roughly 2.5% year over year to $11.62 billion, aligning with street estimates. However, the EPS guidance of $0.51 to $0.61 fell short of the expected $0.67. The anticipated decrease in gross margins to around 7% for the March quarter, a decline of 40 basis points year over year, is largely responsible for the EPS shortfall. Daryanani pointed to two main factors: competitive pressures in the Asia-Pacific and India regions, and a product and vertical mix shift, which, along with continued investments in digital strategy, are expected to create headwinds.
While Ingram Micro did not provide a detailed guide for the calendar year 2025, Daryanani anticipates growth acceleration and potential margin expansion as the year progresses. The updated price target of $26 reflects a revised forward twelve months EPS estimate. InvestingPro subscribers have access to 8 additional key insights about Ingram Micro, including detailed margin analysis and growth metrics, along with a comprehensive Pro Research Report that provides deep-dive analysis of the company’s financial health and market position.
In other recent news, Ingram Micro reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.92, while revenue reached $13.34 billion, marking a 2.5% increase year-over-year. The company achieved full-year net sales of $48 billion, maintaining steady performance compared to the previous year. Ingram Micro has provided guidance for the first quarter of 2025, with expected net sales between $11.43 billion and $11.83 billion, indicating a potential growth of 2.6% at the midpoint. The company remains focused on its digital transformation initiatives, particularly the deployment of its Xvantage digital platform, which is expected to drive future performance.
Additionally, Ingram Micro’s management highlighted the company’s strategic direction towards becoming a leading business-to-business platform in the global technology ecosystem. The company is also experiencing competitive pressures in the IT distribution market, especially in regions like India, which may impact its short-term gross margins. Despite these challenges, Ingram Micro continues to focus on revenue quality and growth in advanced solutions and cloud services. Analysts have taken note of the company’s strategic investments and cautious approach in competitive markets.
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