CDW (CDW) AI Stock Analysis

• Market Cap: $16.18B
• Dividend Yield: 1.81%
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 15.4
• Beta (1Y): 1.22
• Revenue Growth: 6.09%
• EPS Growth: -3.84%
• Country: US
• Employees: 15,100
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.57
• Shares Outstanding: 130,193,660
• 10 Day Avg. Volume: 1,866,875
• 30 Day Avg. Volume: 1,716,791
• PEG Ratio: 19.31
• Price to Book (P/B): 6.86
• Price to Sales (P/S): 0.80
• P/FCF Ratio: 16.44
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.98
• Enterprise Value/Gross Profit: 4.50
• Enterprise Value/Ebitda: 11.68
• 1Y Price Target: $160.43
• Price Target Upside: 28.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $134.00 ▲(7.51% Upside)

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

Strong free cash flow generation

CDW’s free cash flow converts at roughly 80–90% of non‑GAAP net income with adjusted FCF ~ $1.09B in 2025. This durable cash conversion underpins repeated dividends, opportunistic buybacks, targeted M&A and debt paydown, preserving strategic optionality over the medium term.

Mix shift to higher‑margin software, cloud and services

Sustained double‑digit growth in software, cloud and managed services increases recurring and higher margin revenue. That structural mix shift supported gross margin expansion and provides a more resilient profit base, improving long‑term margin sustainability versus hardware‑centric sales.

Diversified end markets and multi‑channel model

CDW’s exposure across small business, education, state & local government, healthcare and international channels reduces single‑market concentration. Coupled with direct, e‑commerce and vendor partnerships, this durable diversification smooths revenue cycles and supports steadier demand across economic swings.

Negative Factors

Meaningful leverage on balance sheet

CDW is noticeably levered with net debt around $5B and leverage metrics above ideal levels. While liquidity and targeted leverage range provide flexibility, elevated debt increases financial vulnerability to slower cash flow, raises interest exposure, and constrains capital allocation under stress.

Elevated SG&A and operating‑cost pressure

Rising performance‑based pay and commissions have materially increased SG&A, compressing operating margins despite gross margin gains. If elevated compensation and selling costs persist, they can structurally limit operating leverage and earnings elasticity as revenue growth normalizes.

Demand and supply visibility risks (memory, federal spending)

Volatile component pricing, pull‑forward effects and federal spending uncertainty create ongoing unpredictability in product demand and margins. These structural supply/demand risks make revenue timing and profitability harder to forecast and can produce sustained quarter‑to‑quarter unevenness.

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 products and services, as well as integrated IT solutions, including on-premise, hybrid, and cloud capabilities across data center and networking, digital workspace, and security. Its hardware products comprise notebooks/mobile devices, network communications, desktop computers, video monitors, enterprise and data storage, and others; and software products consists of application suites, security, virtualization, operating systems, and network management. The company also provides advisory and design, software development, implementation, managed, professional, configuration, and telecom services, as well as warranties; mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. The company was founded in 1984 and is headquartered in Vernon Hills, Illinois.

How the Company Makes Money

CDW generates revenue primarily through the sale of technology products and services. Its key revenue streams include direct sales of hardware and software, which account for a significant portion of its revenues, as well as recurring revenue from managed services and cloud solutions. The company benefits from strategic partnerships with leading technology vendors, allowing it to offer a broad portfolio of products while leveraging vendor marketing and sales programs. Additionally, CDW's extensive customer base, ranging from small businesses to large enterprises and government agencies, provides a steady demand for its offerings, contributing to its overall financial performance.

CDW Financial Statement Overview

Summary

Profitability and free-cash-flow conversion are solid (FCF ~90% of net income), supporting shareholder returns and flexibility. Offsetting this, revenue growth has been uneven with recent margin softness, and the balance sheet remains meaningfully levered (debt-to-equity ~1.5x), which raises financial risk.

Income Statement

CDW shows solid profitability with stable gross margins (~20–22%) and consistent operating profitability, though margins eased modestly from 2023/2024 into TTM (Trailing-Twelve-Months) (net margin ~4.8% vs ~5.1% in 2023–2024). Growth has been choppy: revenue declined in 2023 and 2024, then returned to modest growth in TTM (Trailing-Twelve-Months). Overall, it’s a steady earner, but not a strong top-line grower and recent margin pressure is a watch item.

Balance Sheet

Leverage remains meaningful, with debt running above equity (debt-to-equity ~1.5x in TTM (Trailing-Twelve-Months), and higher in prior years), which increases financial risk. That said, equity has improved notably versus 2021–2023, and returns on equity are very high—helped by leverage and a relatively small equity base. Balance sheet quality is improving, but it still screens more levered than ideal.

Cash Flow

Cash generation is a core strength: free cash flow is strong and tracks net income closely (free cash flow at ~90% of net income across periods, including TTM (Trailing-Twelve-Months)). Free cash flow growth turned positive in TTM (Trailing-Twelve-Months) after a down year in 2024, supporting flexibility for debt paydown and shareholder returns. A weaker spot is that operating cash flow is a relatively small share of revenue in TTM (Trailing-Twelve-Months) versus 2022–2024, suggesting some working-capital drag or timing effects.

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	1.66B	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	6.30B	5.99B	5.81B	6.10B	7.35B
Total Liabilities	12.18B	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

• Technical Analysis Sentiment: Negative
• Last Price: 124.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDW, the sentiment is Negative. The current price of 124.64 is below the 20-day moving average (MA) of 130.37, below the 50-day MA of 134.90, and below the 200-day MA of 157.23, indicating a bearish trend. The MACD of -1.79 indicates Positive momentum. The RSI at 37.70 is Neutral, neither overbought nor oversold. The STOCH value of 17.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CDW.

CDW Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LDOS	72 Outperform	$21.68B	15.40	31.05%	0.87%	6.48%	22.17%
CTSH	71 Outperform	$31.95B	14.65	15.16%	1.46%	7.44%	-4.57%
EPAM	68 Neutral	$9.26B	20.67	10.34%	―	14.26%	-15.49%
WIT	66 Neutral	$24.40B	15.81	15.82%	2.78%	-1.97%	48.61%
CDW	65 Neutral	$16.18B	15.38	43.02%	1.81%	6.09%	-3.84%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IT	61 Neutral	$11.36B	16.26	86.85%	―	5.24%	-16.05%

CDW Corporate Events

CDW posts strong Q4 2025 results, raises dividend

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 average daily sales up 4.6% and strength in software, notebooks and mobile devices, and services, while gross profit increased 8.6% to $1.25 billion and margin improved to 22.8% on higher contribution from netted-down revenue. Segment performance was mixed but generally positive, with corporate sales slightly lower, small business revenue surging 18.4%, public segment sales up 7.0% driven by double-digit growth in education and mid-single-digit gains in healthcare and government, and UK/Canada sales up 8.4%. Operating income for the quarter grew 5.4% to $431 million, while net income increased 5.8% to $280 million and diluted EPS rose to $2.14, supported by lower state taxes and disciplined capital management, even as selling and administrative expenses climbed on higher performance-based pay and coworker costs. For the full year 2025, CDW delivered 6.8% net sales growth to $22.42 billion and maintained strong cash generation that enabled both M&A activity and the return of approximately $982 million to shareholders via dividends and share repurchases; the board reinforced this shareholder-return strategy by declaring a quarterly cash dividend of $0.63 per share payable on March 10, 2026 to stockholders of record on February 25, 2026.

The most recent analyst rating on (CDW) stock is a Hold with a $132.00 price target. To see the full list of analyst forecasts on CDW stock, see the CDW Stock Forecast page.

CDW Expands Credit Facility and Renews Executive Protections

On December 17, 2025, CDW LLC entered into a new five-year $2.88 billion senior unsecured credit facility, comprising a $634.5 million term loan and a $2.25 billion multi-currency revolving credit facility, to refinance existing debt, fund working capital, and support general corporate purposes. The agreement consolidates and replaces CDW’s prior term and revolving loan arrangements, introduces updated market terms and flexible incremental capacity of up to $1 billion, and maintains a maximum leverage covenant with provisions allowing temporary higher leverage following qualified acquisitions, collectively enhancing the company’s financial flexibility and access to liquidity. On December 19, 2025, CDW Corporation also renewed and extended compensation protection agreements for four named executive officers through January 1, 2029, modifying bonus-related severance calculations and reaffirming restrictive covenants such as non-competition, which signals continued focus on leadership retention and governance stability.

The most recent analyst rating on (CDW) stock is a Buy with a $177.00 price target. To see the full list of analyst forecasts on CDW stock, see the CDW Stock Forecast page.