CDW (CDW)
NASDAQ:CDW
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CDW
(NASDAQ:CDW)
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Rating:65Neutral
Price Target:
$133.00
▲(4.93% Upside)
Action:ReiteratedDate:02/05/26
CDW scores as a steady, cash-generative business with reasonable valuation, supported by earnings-call guidance for modest EPS growth and continued capital returns. The score is held back by leverage and margin/expense pressures, plus mixed technicals with weaker longer-term trend signals and near-term demand unevenness risks.
Positive Factors
Cash generation & FCF conversion
CDW converts a very high share of earnings into cash (FCF ~90% of net income and ~$1.09B adjusted FCF in 2025), providing durable internal funding for debt reduction, M&A and shareholder returns. Strong cash conversion supports capital allocation flexibility through cycles.
Negative Factors
Meaningful leverage
CDW carries material leverage (debt-to-equity ~1.5x and net leverage around targeted 2.0–3.0x), which constrains balance‑sheet flexibility. Elevated debt increases interest and refinancing risk, reduces optionality for opportunistic M&A or buybacks, and magnifies earnings sensitivity to downturns.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & FCF conversion
CDW converts a very high share of earnings into cash (FCF ~90% of net income and ~$1.09B adjusted FCF in 2025), providing durable internal funding for debt reduction, M&A and shareholder returns. Strong cash conversion supports capital allocation flexibility through cycles.
Read all positive factors
CDW (CDW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.35B
Dividend Yield1.81%
Average Volume (3M)1.54M
Price to Earnings (P/E)16.8
Beta (1Y)1.16
Revenue Growth6.09%
EPS Growth-3.84%
CountryUS
Employees15,100
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)2.57
Shares Outstanding128,993,590
10 Day Avg. Volume1,318,567
30 Day Avg. Volume1,540,592
Financial Highlights & Ratios
PEG Ratio19.31
Price to Book (P/B)6.86
Price to Sales (P/S)0.80
P/FCF Ratio16.44
Enterprise Value/Market Cap1.35
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit4.53
Enterprise Value/Ebitda11.31
Forecast
1Y Price Target
$156.33Price Target Upside23.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.51
Revenue Forecast (FY)$23.08B
CDW Business Overview & Revenue Model
Company Description
CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software produ...
How the Company Makes Money
CDW primarily makes money by selling third-party IT products and related services to organizations, earning revenue largely from the margin between its purchase cost from vendors and the price charged to customers. Key revenue streams include: (1)...
CDW Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCDW Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call reflected solid operational and financial performance with record full‑year EPS, strong cash generation, and outsized growth in higher‑margin software, cloud, and services—supported by notable wins in small business, education, and state & local government. However, near‑term risks and cost dynamics temper the outlook: elevated SG&A, operating margin pressure, memory price and supply volatility that produced pull‑forward demand, and federal spending disruptions create unevenness, particularly in Q1 and potentially in the back half of the year. Management expects modest gross profit and mid‑single‑digit EPS growth for 2026 and reiterated disciplined capital allocation.Positive Updates
Quarterly Revenue and Profit Growth
Q4 net sales of $5.5B, up ~5% year-over-year; Q4 non-GAAP gross profit reported at ~$1.3B (management commentary ranged $1.25B–$1.3B), up ~8.6%–9% YoY; Q4 non-GAAP operating income ~ $502–503M, roughly flat to up ~0.6%–1% YoY; Q4 non-GAAP EPS of $2.57, up ~3.8%–4% YoY.
Negative Updates
Elevated SG&A and Expense Volatility
Q4 non-GAAP SG&A totaled $752M, up 14.6% YoY driven by higher commissions and performance-based expenses; expense timing created asymmetry vs. 2024 and compressed operating margin dynamics.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly Revenue and Profit Growth
Q4 net sales of $5.5B, up ~5% year-over-year; Q4 non-GAAP gross profit reported at ~$1.3B (management commentary ranged $1.25B–$1.3B), up ~8.6%–9% YoY; Q4 non-GAAP operating income ~ $502–503M, roughly flat to up ~0.6%–1% YoY; Q4 non-GAAP EPS of $2.57, up ~3.8%–4% YoY.
Read all positive updates
Company Guidance
CDW guided 2026 as a low‑single‑digit US IT market year with CDW targeting 200–300 basis points of outperformance; full‑year gross profit growth is expected in the low single digits with second‑half gross profit slightly above the first half and gross margin modestly higher than 2025 (2025 full‑year gross margin ~21.7%, Q4 22.8%); full‑year non‑GAAP diluted EPS is expected to grow mid‑single digits and currency is expected to be neutral to reported growth. For Q1 they expect sequential gross profit to decline mid‑single digits but still post mid‑single‑digit year‑over‑year growth (with a modest pull‑forward into Q1 roughly in line with or slightly above the ~$50M seen in Q4), Q1 operating expenses down on a dollar basis with the lowest quarterly operating margin of the year, and Q1 non‑GAAP EPS up mid‑single digits. Capital allocation targets remain returning 50–75% of adjusted free cash flow to shareholders (they returned ~90% in 2025), a roughly 25% dividend payout ratio of non‑GAAP net income, opportunistic buybacks, a target net leverage range of 2.0–3.0x (ended Q4 at ~2.4x), liquidity of about $2.5B (cash + revolver availability), and a stated adjusted‑FCF conversion rule of thumb of 80–90% of non‑GAAP net income.CDW Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
58
Neutral
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.42B | 21.00B | 21.38B | 23.75B | 20.82B |
| Gross Profit | 4.87B | 4.60B | 4.65B | 4.69B | 3.57B |
| EBITDA | 1.95B | 1.93B | 1.95B | 2.01B | 1.64B |
| Net Income | 1.07B | 1.08B | 1.10B | 1.11B | 988.60M |
Balance Sheet | |||||
| Total Assets | 16.03B | 14.68B | 13.28B | 13.13B | 13.20B |
| Cash, Cash Equivalents and Short-Term Investments | 618.70M | 717.70M | 588.70M | 315.20M | 258.10M |
| Total Debt | 6.33B | 5.99B | 5.81B | 6.10B | 7.35B |
| Total Liabilities | 13.42B | 12.33B | 11.24B | 11.53B | 12.49B |
| Stockholders Equity | 2.61B | 2.35B | 2.04B | 1.60B | 705.70M |
Cash Flow | |||||
| Free Cash Flow | 1.09B | 1.15B | 1.45B | 1.21B | 684.60M |
| Operating Cash Flow | 1.21B | 1.28B | 1.60B | 1.34B | 784.60M |
| Investing Cash Flow | 70.20M | -659.20M | -229.60M | -164.50M | -2.77B |
| Financing Cash Flow | -1.18B | -686.90M | -1.10B | -1.10B | 832.80M |
CDW Technical Analysis
Neutral
126.75
Price Trends
124.36
Positive
131.07
Negative
147.10
Negative
Market Momentum
0.43
Negative
62.16
Neutral
87.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDW, the sentiment is Neutral. The current price of 126.75 is above the 20-day moving average (MA) of 120.45, above the 50-day MA of 124.36, and below the 200-day MA of 147.10, indicating a neutral trend. The MACD of 0.43 indicates Negative momentum. The RSI at 62.16 is Neutral, neither overbought nor oversold. The STOCH value of 87.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CDW.
CDW Risk Analysis
CDW disclosed 23 risk factors in its most recent earnings report. CDW reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CDW Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $28.31B | 17.90 | 14.84% | 1.46% | 7.44% | -4.57% | |
68 Neutral | $6.71B | 30.32 | 10.27% | ― | 14.26% | -15.49% | |
68 Neutral | $19.60B | 16.69 | 31.07% | 0.87% | 6.48% | 22.17% | |
67 Neutral | $22.99B | 21.25 | 15.49% | 2.78% | -1.97% | 48.61% | |
65 Neutral | $16.35B | 16.77 | 42.94% | 1.81% | 6.09% | -3.84% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $10.43B | 24.91 | 74.65% | ― | 5.24% | -16.05% |
* Technology Sector Average
CDW
CDW
126.75
-19.59
-13.39%
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59.20
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-14.13%
EPAM
Epam Systems
123.85
-23.91
-16.18%
IT
Gartner
148.02
-251.86
-62.98%
WIT
Wipro
2.26
-0.47
-17.13%
LDOS
Leidos Holdings
155.63
15.11
10.75%
CDW Corporate Events
Executive/Board Changes
CDW Announces Planned Board Transition as Mehrotra Departs
Neutral
Mar 27, 2026
On March 24, 2026, CDW Corporation announced that board member Sanjay Mehrotra informed the company he will not stand for reelection at the 2026 Annual Meeting of Stockholders and will serve through the remainder of his current term. The company s...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
CDW posts strong Q4 2025 results, raises dividend
Positive
Feb 4, 2026
On February 4, 2026, CDW reported its fourth quarter and full-year 2025 results, highlighting solid top-line growth despite ongoing economic and geopolitical uncertainty. Fourth-quarter 2025 net sales rose 6.3% year-on-year to $5.51 billion, with ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.