PC Connection (CNXN) AI Stock Analysis

• Market Cap: $1.49B
• Dividend Yield: 1.02%
• Average Volume (3M): 82.44K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.83
• Revenue Growth: 3.19%
• EPS Growth: -4.91%
• Country: US
• Employees: 2,580
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.97
• Shares Outstanding: 25,245,224
• 10 Day Avg. Volume: 112,479
• 30 Day Avg. Volume: 82,438
• PEG Ratio: 4.74
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 0.65
• P/FCF Ratio: 10.96
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 2.22
• Enterprise Value/Ebitda: 9.87
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 3.51
• Revenue Forecast (FY): $2.91B

• Rating: 73 Outperform
• Price Target: $65.00 ▲(11.47% Upside)

PC Connection's overall stock score reflects strong financial health and positive earnings call highlights, such as record gross profit and growth in key segments. However, the declining revenue trend, bearish technical indicators, and moderate valuation weigh on the score.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability and provides flexibility for strategic investments and growth.

Record Gross Profit

Record gross profit and margin expansion indicate effective cost management and strong demand for high-margin services, supporting long-term profitability.

Growth in Key Segments

Growth in Business Solutions and Enterprise Solutions segments shows resilience and potential for future expansion in core markets.

Negative Factors

Decline in Public Sector Solutions

A significant decline in Public Sector Solutions sales could impact overall revenue growth, especially if government spending remains constrained.

Net Income Decline

A decline in net income suggests challenges in maintaining profitability, which could affect future earnings and investment capacity.

Higher SG&A Expenses

Rising SG&A expenses could pressure margins if not managed effectively, potentially impacting long-term cost efficiency and profitability.

PC Connection Business Overview & Revenue Model

Company Description

PC Connection, Inc. (CNXN) is a leading technology solutions provider that specializes in delivering a wide range of IT products and services to businesses, educational institutions, and government agencies. Founded in 1982, the company operates primarily in the sectors of IT hardware and software distribution, offering core products such as computers, servers, networking equipment, and software solutions. PC Connection also provides value-added services including IT consulting, integration, and support, enabling clients to effectively manage their technology needs.

How the Company Makes Money

PC Connection generates revenue through multiple streams, primarily by selling technology products and solutions to a diverse customer base, including small to medium-sized businesses, large enterprises, and public sector organizations. The company's revenue model is largely based on the direct sale of IT hardware and software, as well as through its e-commerce platform, which allows for efficient product ordering and delivery. Key revenue streams include margins on product sales, service fees from IT consulting and support services, and recurring revenues from maintenance contracts and subscription-based software solutions. Significant partnerships with major technology vendors such as Microsoft, Dell, and HP also contribute to its earnings by allowing the company to offer a broad array of products and leverage vendor incentives for sales growth.

PC Connection Financial Statement Overview

Summary

PC Connection shows strong financial health with a robust balance sheet and improving cash flow metrics. Despite a revenue decline, the company maintains operational efficiency and a low-risk financial structure, positioning it well for future growth opportunities.

Income Statement

PC Connection's income statement shows a stable gross profit margin of around 18% over the TTM, with a slight decline in net profit margin to 2.97%. Revenue has decreased by 5.41% in the TTM, indicating a challenging market environment. However, the company maintains consistent EBIT and EBITDA margins, suggesting operational efficiency.

Balance Sheet

The balance sheet is strong with a very low debt-to-equity ratio of 0.0029, indicating minimal leverage and financial risk. The return on equity is healthy at 9.64%, reflecting effective use of shareholder funds. The equity ratio stands at a solid 69.1%, highlighting a robust capital structure.

Cash Flow

Cash flow analysis reveals a significant 80.21% growth in free cash flow, demonstrating improved cash generation capabilities. The operating cash flow to net income ratio is low at 0.07, but the free cash flow to net income ratio is strong at 0.77, indicating good cash conversion from profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.88B	2.80B	2.85B	3.12B	2.89B	2.59B
Gross Profit	533.50M	519.79M	511.74M	526.18M	464.58M	418.81M
EBITDA	119.86M	110.46M	118.22M	132.58M	108.68M	86.67M
Net Income	83.73M	87.09M	83.27M	89.22M	69.91M	55.77M
Balance Sheet
Total Assets	1.31B	1.30B	1.19B	1.10B	1.08B	1.03B
Cash, Cash Equivalents and Short-Term Investments	399.20M	442.61M	297.19M	122.93M	108.31M	95.66M
Total Debt	437.00K	3.36M	4.91M	8.16M	10.21M	13.56M
Total Liabilities	402.78M	388.36M	347.61M	333.65M	400.91M	390.58M
Stockholders Equity	902.74M	910.99M	840.77M	766.17M	682.47M	636.33M
Cash Flow
Free Cash Flow	55.71M	166.29M	188.36M	25.81M	47.45M	25.07M
Operating Cash Flow	63.27M	173.87M	197.95M	34.89M	57.75M	36.10M
Investing Cash Flow	43.71M	-115.29M	-160.20M	-9.08M	-8.73M	-11.03M
Financing Cash Flow	-86.65M	-25.22M	-15.73M	-11.19M	-36.37M	-19.47M

PC Connection Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 58.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNXN, the sentiment is Negative. The current price of 58.31 is below the 20-day moving average (MA) of 59.32, below the 50-day MA of 59.44, and below the 200-day MA of 62.44, indicating a bearish trend. The MACD of 0.23 indicates Positive momentum. The RSI at 47.59 is Neutral, neither overbought nor oversold. The STOCH value of 29.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNXN.

PC Connection Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXN	73 Outperform	$1.49B	18.21	9.30%	1.02%	3.19%	-4.91%
CLMB	73 Outperform	$498.48M	23.26	21.27%	0.63%	51.09%	25.86%
AVT	67 Neutral	$3.99B	18.29	4.71%	2.77%	-2.30%	-29.75%
ARW	64 Neutral	$5.79B	12.41	7.70%	―	3.16%	1.09%
SCSC	64 Neutral	$867.39M	12.32	8.11%	―	-4.88%	2.57%
NSIT	62 Neutral	$2.49B	18.77	8.51%	―	-6.69%	-51.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

PC Connection Corporate Events

PC Connection Reports Q3 Financial Results, Decline in Sales

On October 29, 2025, Connection reported its third-quarter financial results, revealing a 2.2% year-over-year decline in net sales to $709.1 million, while gross profit rose by 2.4% to $138.6 million. Despite a decrease in net income by 8.6% to $24.7 million, the company maintained a gross margin increase to 19.6%. The Board of Directors declared a quarterly dividend of $0.15 per share, payable on November 28, 2025. The company’s strategy focuses on data center modernization, digital workplace transformation, and supply chain innovation to drive growth and shareholder value.