PC Connection (CNXN) AI Stock Analysis

• Market Cap: $1.61B
• Dividend Yield: 0.72%
• Average Volume (3M): 148.80K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.84
• Revenue Growth: -1.70%
• EPS Growth: 4.45%
• Country: US
• Employees: 2,580
• Sector: Technology
• Sector Strength: 65
• Industry: Technology Distributors
• EPS (TTM): 3.29
• Shares Outstanding: 25,874,512
• 10 Day Avg. Volume: 89,741
• 30 Day Avg. Volume: 148,798
• PEG Ratio: 4.24
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.68
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

PC Connection's overall stock score of 71 reflects strong financial fundamentals and a solid balance sheet, which are its primary strengths. However, mixed technical indicators and challenges reported in the earnings call somewhat temper the outlook. The fair valuation and positive corporate events contribute positively, indicating resilience and stability in the company's performance.

PC Connection Business Overview & Revenue Model

Company Description

PC Connection, Inc., together with its subsidiaries, provides various information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories, as well as provides services related to design, configuration, and implementation of IT solutions. The company markets its products and services through its websites comprising connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) that include small office/home office customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales, and marketing programs targeted to specific customer populations, as well as through digital, web, and print media advertising. The company was founded in 1982 and is headquartered in Merrimack, New Hampshire.

How the Company Makes Money

PC Connection generates revenue through the sale of a wide array of IT products and services. The company's primary revenue streams include the sale of computer systems, software, and peripheral equipment. Additionally, PC Connection earns from offering professional services such as consulting, design, installation, and support services. Significant partnerships with leading technology manufacturers, such as Apple, Microsoft, and Cisco, contribute to its earnings by enabling access to the latest technology solutions. The company's revenue model is enhanced by its ability to provide customized IT solutions, effectively addressing the unique requirements of its diverse customer base across multiple industries.

PC Connection Financial Statement Overview

Summary

PC Connection showcases strong financial fundamentals with effective profitability, a solid balance sheet, and robust cash flow generation. Despite a dip in revenue, the company maintains strong margins and low leverage, suggesting resilience and stability. Continued focus on revenue growth and cash management could enhance future financial performance.

Income Statement

PC Connection shows consistent profitability with a stable gross profit margin of 18.3% in TTM (Trailing-Twelve-Months). The net profit margin rose slightly to 3.1%, indicating efficient cost management. However, revenue has seen a decline from the previous year, which may signal a need for growth strategies. EBIT and EBITDA margins remain stable, suggesting strong operational efficiency.

Balance Sheet

The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.002, reflecting minimal leverage and strong financial health. The equity ratio is high at 70.1%, indicating solid asset backing by equity. Return on equity is steady, enhancing investor confidence. The liquidity position is strong with substantial cash reserves, supporting operational flexibility.

Cash Flow

PC Connection's cash flow is strong with a free cash flow to net income ratio of 1.94, indicating effective cash generation relative to profit. Operating cash flow to net income is 2.00, demonstrating efficient cash conversion. However, there is a slight decline in free cash flow growth rate, suggesting a need for improved cash management in the future.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.80B	2.85B	3.12B	2.89B	2.59B
	Gross Profit
519.79M	511.74M	526.18M	464.58M	418.81M
	EBIT
97.06M	105.84M	120.55M	96.52M	72.07M
	EBITDA
97.06M	118.22M	132.53M	108.72M	86.67M
	Net Income Common Stockholders
87.09M	83.27M	89.22M	69.91M	55.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
442.61M	297.19M	122.93M	108.31M	95.66M
	Total Assets
1.30B	1.19B	1.10B	1.08B	1.02B
	Total Debt
3.36M	4.91M	8.16M	6.79M	9.63M
	Net Debt
-174.96M	-140.04M	-114.77M	-101.52M	-86.02M
	Total Liabilities
388.36M	347.61M	333.65M	401.69M	379.05M
	Stockholders Equity
910.99M	840.77M	766.17M	682.47M	636.33M
Cash Flow		Free Cash Flow
173.87M	188.36M	25.81M	47.45M	25.07M
	Operating Cash Flow
173.87M	197.95M	34.89M	57.75M	36.10M
	Investing Cash Flow
-115.29M	-160.20M	-9.08M	-8.73M	-11.03M
	Financing Cash Flow
-25.22M	-15.73M	-11.19M	-36.37M	-19.47M

PC Connection Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNXN, the sentiment is Positive. The current price of 66.39 is above the 20-day moving average (MA) of 60.90, above the 50-day MA of 62.10, and below the 200-day MA of 68.53, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 68.70 is Neutral, neither overbought nor oversold. The STOCH value of 91.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$1.61B	18.88	9.94%	0.72%	-1.70%	4.45%
ARW	72 Outperform	$5.78B	15.30	6.78%	―	-15.66%	-54.03%
AVT	71 Outperform	$4.22B	13.84	6.45%	2.77%	-12.21%	-51.31%
SCSC	71 Outperform	$783.45M	13.15	6.79%	―	-15.92%	-25.15%
NSIT	69 Neutral	$4.27B	20.51	14.24%	―	-5.17%	-9.73%
Sector *	59 Neutral	$10.75B	10.37	-6.64%	3.00%	7.30%	-12.02%
VSH	49 Neutral	$1.76B	26.74	-1.47%	3.08%	-13.65%	-110.03%

PC Connection Corporate Events

PC Connection Reports Strong Q1 2025 Financial Results

On April 30, 2025, Connection reported its first quarter 2025 financial results, highlighting a 10.9% increase in net sales to $701 million and a 2.5% rise in net income to $13.5 million. The company announced a quarterly dividend of $0.15 per share and a $50 million increase in its share repurchase program, bringing the total authorization to $170 million. The results reflect strong demand for digital workplace solutions and datacenter modernization, contributing to a 20% growth in adjusted earnings per share. The Public Sector Solutions segment saw significant growth, with a 54.7% increase in net sales, driven by a 228% rise in federal government sales.

Spark’s Take on CNXN Stock

According to Spark, TipRanks’ AI Analyst, CNXN is a Neutral.

PC Connection’s stock is supported by strong financial fundamentals and a stable balance sheet, though technical indicators suggest bearish momentum. Valuation appears fair with a reasonable P/E ratio, and while the earnings call highlights challenges, it also provides optimism for future growth. The absence of impactful corporate events means the overall score reflects internal performance and market conditions.

To see Spark’s full report on CNXN stock, click here.

PC Connection Reports Mixed 2024 Financial Results

On February 5, 2025, Connection announced its financial results for the fourth quarter and full year of 2024, showing mixed performance. Despite a 1.8% increase in net sales in the fourth quarter, net income decreased by 12.9% compared to the previous year. The full year results revealed a net income increase of 4.6%, driven by record gross margins from sales of advanced technologies such as cloud, software, and security solutions. The company declared a quarterly dividend of $0.15 per share, highlighting its confidence in long-term growth, despite challenges faced in certain segments.