Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at CDW (NASDAQ:CDW) and the best and worst performers in the it distribution & solutions industry.
IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.
The 8 it distribution & solutions stocks we track reported a softer Q4. As a group, revenues missed analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 27.1% since the latest earnings results.
Best Q4: CDW (NASDAQ:CDW)
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
CDW reported revenues of $5.19 billion, up 3.3% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates.
"The team delivered a solid finish to a challenging year, demonstrating our clear commitment to our customers during this period of uneven market conditions," said Christine A. Leahy, chair and chief executive officer, CDW.
CDW pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 27.6% since reporting and currently trades at $144.57.
Is now the time to buy CDW? Access our full analysis of the earnings results here, it’s free.
Avnet (NASDAQ:AVT)
With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Avnet reported revenues of $5.66 billion, down 8.7% year on year, outperforming analysts’ expectations by 1.6%. The business performed better than its peers, but it was unfortunately a mixed quarter with an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ EPS guidance for next quarter estimates.
The stock is down 21.9% since reporting. It currently trades at $40.91.
Is now the time to buy Avnet? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: ePlus (NASDAQ:PLUS)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
ePlus reported revenues of $511 million, flat year on year, falling short of analysts’ expectations by 7.7%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 33.7% since the results and currently trades at $53.70.
Read our full analysis of ePlus’s results here.
Connection (NASDAQ:CNXN)
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Connection reported revenues of $708.9 million, up 1.8% year on year. This number came in 1% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ EPS estimates.
The stock is down 19% since reporting and currently trades at $58.05.
Read our full, actionable report on Connection here, it’s free.
Ingram Micro (NYSE:INGM)
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE:INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.
Ingram Micro reported revenues of $13.34 billion, up 2.5% year on year. This print topped analysts’ expectations by 1.2%. However, it was a slower quarter with EPS guidance for next quarter estimates falling below analysts’ estimates.
The stock is down 23.7% since reporting and currently trades at $15.98.
Read our full, actionable report on Ingram Micro here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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