PC Connection (CNXN) AI Stock Analysis

• Market Cap: $1.63B
• Dividend Yield: 0.85%
• Average Volume (3M): 83.07K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.91
• Revenue Growth: 4.94%
• EPS Growth: -1.79%
• Country: US
• Employees: 2,580
• Sector: Technology
• Sector Strength: 86
• Industry: Technology Distributors
• EPS (TTM): 0.97
• Shares Outstanding: 25,389,004
• 10 Day Avg. Volume: 91,735
• 30 Day Avg. Volume: 83,067
• 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: 0.82
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 2.52
• Enterprise Value/Ebitda: 11.77
• 1Y Price Target: $72.00
• Price Target Upside: 11.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: $72.00 ▲(11.44% Upside)

PC Connection's overall stock score reflects its solid financial performance and consistent revenue growth, which are tempered by mixed technical indicators and valuation metrics. The earnings call provided a balanced view with both positive growth prospects and challenges such as margin pressure and decreased net income. The company's strong backlog and market trends offer optimism for future growth.

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 multiple streams, primarily by selling technology products from leading manufacturers to businesses and institutions. The company earns money through direct product sales, where it acts as a reseller for major brands like Dell, HP, and Cisco. Additionally, PC Connection's revenue model includes service offerings such as IT consulting, managed services, and support, which provide recurring revenue. The company also benefits from partnerships with technology vendors, allowing it to offer bundled solutions and competitive pricing, which enhances its market position and profitability. Key revenue streams include both product sales and service contracts, contributing to a diversified income portfolio.

PC Connection Financial Statement Overview

Summary

PC Connection demonstrates strong financial health with consistent revenue growth, robust profit margins, and a solid balance sheet. However, recent slowing revenue and cash flow growth rates suggest potential challenges in sustaining momentum.

Income Statement

PC Connection's income statement reveals consistent revenue growth, with a TTM revenue increase to $2.87 billion from $2.80 billion in the previous year. The gross profit margin remains robust at around 18.3%, reflecting efficient cost management. Net profit margin has slightly improved, reaching 3.04% for the TTM. EBIT and EBITDA margins are stable, indicating strong operational efficiency. However, the revenue growth rate has slowed compared to previous years, suggesting potential market saturation or increased competition.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio of 0.0012, indicating minimal reliance on debt financing. The equity ratio stands at a healthy 70.3%, reflecting a solid financial foundation. Return on Equity (ROE) is stable at 9.97%, showcasing efficient use of shareholder funds. The company has increased cash reserves, providing a cushion for future investments or downturns. However, the slight decline in equity between the latest TTM and the previous annual period suggests some challenges in retaining earnings.

Cash Flow

PC Connection demonstrates a strong cash flow position with a positive free cash flow of $56.5 million in the TTM. The operating cash flow to net income ratio is favorable at 0.73, indicating effective cash generation from operations. However, the free cash flow growth rate has slowed compared to previous periods, and there is a notable decline in operating cash flow from $173.9 million in the previous annual period to $64.2 million in the TTM. This could signal potential pressures on future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.89B	2.80B	2.85B	3.12B	2.89B	2.59B
Gross Profit	530.26M	519.79M	511.74M	526.18M	464.58M	418.81M
EBITDA	113.46M	110.49M	118.22M	132.53M	108.72M	86.67M
Net Income	86.05M	87.09M	83.27M	89.22M	69.91M	55.77M
Balance Sheet
Total Assets	1.27B	1.30B	1.19B	1.10B	1.08B	1.02B
Cash, Cash Equivalents and Short-Term Investments	346.09M	442.61M	297.19M	122.93M	108.31M	95.66M
Total Debt	2.55M	3.36M	4.91M	8.16M	6.79M	9.63M
Total Liabilities	384.46M	388.36M	347.61M	333.65M	401.69M	379.05M
Stockholders Equity	884.82M	910.99M	840.77M	766.17M	682.47M	636.33M
Cash Flow
Free Cash Flow	19.95M	166.29M	188.36M	25.81M	47.45M	25.07M
Operating Cash Flow	25.80M	173.87M	197.95M	34.89M	57.75M	36.10M
Investing Cash Flow	92.83M	-115.29M	-160.20M	-9.08M	-8.73M	-11.03M
Financing Cash Flow	-64.39M	-25.22M	-15.73M	-11.19M	-36.37M	-19.47M

PC Connection Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 64.61 is above the 20-day moving average (MA) of 62.94, above the 50-day MA of 64.16, and below the 200-day MA of 65.97, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 55.85 is Neutral, neither overbought nor oversold. The STOCH value of 75.01 is Neutral, 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	74 Outperform	$1.63B	19.49	9.78%	0.85%	4.94%	-1.79%
SCSC	71 Outperform	$955.26M	14.49	7.82%	―	-6.72%	-1.14%
ARW	70 Outperform	$6.51B	13.97	7.74%	―	-3.95%	-16.72%
AVT	67 Neutral	$4.55B	18.94	4.83%	2.54%	-6.55%	-49.61%
Sector *	61 Neutral	$35.09B	8.26	-10.58%	1.90%	8.56%	-9.51%
NSIT	61 Neutral	$4.10B	30.41	8.67%	―	-7.61%	-50.01%
VSH	53 Neutral	$2.10B	26.74	-4.11%	2.69%	-6.36%	-151.95%

PC Connection Corporate Events

PC Connection Reports Q2 2025 Financial Results

On July 30, 2025, Connection announced its second quarter financial results for the period ending June 30, 2025, reporting a 3.2% increase in net sales to $759.7 million, despite a decrease in net income by 5.2% to $24.8 million. The company also declared a quarterly dividend of $0.15 per share, reflecting its commitment to returning value to shareholders. The results highlighted growth in the Business and Enterprise Solutions segments, while the Public Sector Solutions segment saw a decline. The announcement underscores Connection’s resilience and strategic focus on advanced technologies and customer service amidst a challenging economic environment.