PC Connection (CNXN)
NASDAQ:CNXN
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PC Connection
(NASDAQ:CNXN)
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Rating:74Outperform
Price Target:
$71.00
▲(21.76% Upside)
Action:Reiterated
Date:05/14/26
The score is primarily supported by strong financial quality (notably very low leverage and solid recent free-cash-flow generation) and a constructive, mostly positive earnings update featuring record backlog and improved profitability. The rating is tempered by only mid-range technical momentum and a fair (not bargain) valuation with a modest dividend yield, alongside management’s cautions about pricing volatility, working-capital/inventory build, and potential second-half demand softening.
Positive Factors
Conservative balance sheet
Exceptionally low leverage and rising equity give Connection durable financial flexibility. This supports continued dividends, buybacks, vendor negotiation power and the ability to invest or withstand cyclical IT demand without stressing solvency or needing emergency financing.
Negative Factors
Choppy revenue history
The multi-year volatile top-line reduces predictability for planning and capital allocation. Episodic declines and rebounds complicate forecasting, margin leverage and investment timing, making sustainable growth trajectory less certain over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Exceptionally low leverage and rising equity give Connection durable financial flexibility. This supports continued dividends, buybacks, vendor negotiation power and the ability to invest or withstand cyclical IT demand without stressing solvency or needing emergency financing.
Read all positive factors
PC Connection (CNXN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.62B
Dividend Yield1.02%
Average Volume (3M)82.44K
Price to Earnings (P/E)21.4
Beta (1Y)0.85
Revenue Growth0.78%
EPS Growth3.87%
CountryUS
Employees2,580
SectorTechnology
Sector Strength88
IndustryTechnology Distributors
Share Statistics
EPS (TTM)3.46
Shares Outstanding25,226,048
10 Day Avg. Volume112,479
30 Day Avg. Volume82,438
Financial Highlights & Ratios
PEG Ratio-57.59
Price to Book (P/B)1.60
Price to Sales (P/S)0.51
P/FCF Ratio25.09
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit2.61
Enterprise Value/Ebitda10.87
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)3.77
Revenue Forecast (FY)$2.98B
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 p...
How the Company Makes Money
Connection primarily makes money by reselling third-party IT products and bundling them with services. Its core revenue stream is product revenue from the sale of computer hardware (e.g., desktops, laptops, servers, networking equipment, periphera...
PC Connection Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presented a generally positive operational and financial beat: consolidated sales, gross profit, operating income, net income and EPS all improved year-over-year, Enterprise and Business Solutions delivered strong growth, backlog is at a multi-year high, liquidity is robust, and the company received notable partner recognitions. Offsetting risks include a significant decline in Public Sector sales tied to a nonrecurring prior-year contract, ongoing supply-chain and memory-driven price volatility, a sizeable inventory build and working-capital absorption, a $3.1M severance charge, and management's caution about potential softening in the back half of 2026. Overall, the positive execution, margin expansion, cash position and capital returns outweigh the near-term operational headwinds and uncertainties.Positive Updates
Consolidated Revenue and Profit Growth
Gross billings grew 4.3% to $1.0 billion (from $978.9M). Total net sales were $721.9 million, up 3.0% year-over-year. Gross profit increased 4.3% to $132.7 million and consolidated gross margin expanded 20 basis points to 18.4%.
Negative Updates
Public Sector Revenue Decline
Public Sector net sales declined 31% to $99.8 million and gross billings fell 21.2% to $135.7 million, largely driven by the absence of a large non-recurring federal contract that affected prior-year results.
Read all updates
Q1-2026 Updates
Positive
Negative
Consolidated Revenue and Profit Growth
Gross billings grew 4.3% to $1.0 billion (from $978.9M). Total net sales were $721.9 million, up 3.0% year-over-year. Gross profit increased 4.3% to $132.7 million and consolidated gross margin expanded 20 basis points to 18.4%.
Read all positive updates
Company Guidance
Management's forward-looking guidance emphasized that Connection expects to outperform the U.S. IT market by 200 basis points in 2026, with a backlog at its highest level since mid‑2022 that management expects to convert largely through Q2–Q3 (Q1 enterprise pull‑ins contributed a low‑to‑mid single‑digit revenue boost), Public Sector trends should improve through the balance of 2026, and the PC refresh cycle will continue through 2026; they cautioned memory‑driven price inflation (prices up while unit counts down) may persist into 2026 or beyond and could cause modest softening in the back half of the year. Management also reiterated capital return and liquidity positions—a $0.20 quarterly dividend payable May 29, ~42,000 shares repurchased in Q1 at an average $57.70 (~$2.4M) with $81.2M remaining authorization, and $411.4M in cash/short‑term investments—while noting planned inventory build (+$50.7M) to secure supply.PC Connection Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
90
Very Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.89B | 2.87B | 2.80B | 2.85B | 3.12B | 2.89B |
| Gross Profit | 544.76M | 539.33M | 519.79M | 511.74M | 526.18M | 464.58M |
| EBITDA | 130.92M | 128.33M | 110.46M | 118.22M | 132.58M | 108.68M |
| Net Income | 87.46M | 83.72M | 87.09M | 83.27M | 89.22M | 69.91M |
Balance Sheet | ||||||
| Total Assets | 1.43B | 1.35B | 1.30B | 1.19B | 1.10B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 411.45M | 406.68M | 442.61M | 297.19M | 122.93M | 108.31M |
| Total Debt | 6.43M | 996.00K | 3.36M | 4.91M | 8.16M | 10.21M |
| Total Liabilities | 503.33M | 440.80M | 388.36M | 347.61M | 333.65M | 400.91M |
| Stockholders Equity | 921.69M | 910.13M | 910.99M | 840.77M | 766.17M | 682.47M |
Cash Flow | ||||||
| Free Cash Flow | 124.43M | 58.05M | 166.29M | 188.36M | 25.81M | 47.45M |
| Operating Cash Flow | 132.09M | 65.44M | 173.87M | 197.95M | 34.89M | 57.75M |
| Investing Cash Flow | -64.90M | 42.83M | -115.29M | -160.20M | -9.08M | -8.73M |
| Financing Cash Flow | -53.39M | -93.37M | -25.22M | -15.73M | -11.19M | -36.37M |
PC Connection Technical Analysis
Positive
58.31
Price Trends
61.80
Positive
60.81
Positive
60.65
Positive
Market Momentum
0.68
Positive
57.60
Neutral
52.31
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 58.31 is below the 20-day moving average (MA) of 64.36, below the 50-day MA of 61.80, and below the 200-day MA of 60.65, indicating a bullish trend. The MACD of 0.68 indicates Positive momentum. The RSI at 57.60 is Neutral, neither overbought nor oversold. The STOCH value of 52.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNXN.
PC Connection Risk Analysis
PC Connection disclosed 54 risk factors in its most recent earnings report. PC Connection reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PC Connection Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $10.65B | 7.96 | 11.15% | ― | 20.49% | 92.31% | |
74 Outperform | $1.62B | 21.38 | 9.67% | 1.02% | 0.78% | 3.87% | |
72 Outperform | $364.32M | 27.07 | 18.67% | 0.63% | 36.31% | 7.03% | |
69 Neutral | $855.87M | 11.45 | 8.07% | ― | 3.76% | 18.30% | |
64 Neutral | $2.69B | 17.19 | 11.17% | ― | -1.83% | -2.39% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $6.89B | 12.98 | 4.33% | 2.77% | 12.68% | -27.94% |
* Technology Sector Average
CNXN
PC Connection
65.23
-2.30
-3.41%
ARW
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207.93
87.29
72.36%
AVT
Avnet
83.33
33.72
67.97%
NSIT
Insight Enterprises
90.59
-45.75
-33.56%
SCSC
ScanSource
42.97
2.75
6.84%
CLMB
Climb Global Solutions
20.03
-7.13
-26.26%
PC Connection Corporate Events
Executive/Board ChangesShareholder Meetings
PC Connection Shareholders Reelect Board, Ratify Deloitte Appointment
Positive
May 13, 2026
On May 13, 2026, PC Connection, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders voted on the election of six directors to serve until the 2027 Annual Meeting. All six nominees, including Patricia Gallup, David Beffa-Negrini, ...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
PC Connection Posts Strong Q1 Results, Declares Dividend
Positive
Apr 29, 2026
On April 29, 2026, Connection reported first-quarter 2026 results showing net sales up 3% year on year to $721.9 million and gross billings up 4.3% to $1.0 billion, while net income jumped 27.8% to $17.2 million and diluted EPS rose to $0.68. The ...
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.