Insight Enterprises (NSIT) AI Stock Analysis

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Insight Enterprises

(NASDAQ:NSIT)

61Neutral

Insight Enterprises scores a moderate 61 due to strong financial management and cash flow generation, which are offset by bearish technical indicators and moderate valuation. While core services and strategic partnerships show growth potential, the company faces challenges from declining revenue and increased expenses. Continued focus on operational efficiency and leveraging strategic partnerships will be essential for improvement.

Positive Factors

Earnings

The company reported Q4/24 non-GAAP EPS of $2.66, which exceeded the forecast and the FactSet consensus forecast.

Investment Rating

Maintaining an OUTPERFORM investment rating on NSIT shares with a 20% upside to the 12-month price target.

Negative Factors

Product Demand

Reducing 2024 and 2025 non-GAAP EPS forecasts due to a delay in a product demand recovery.

Revenue

The company reported Q3/24 total net revenue of $2.09 billion, which was 11% less than the forecast of $2.35 billion and 2% less than the FactSet consensus forecast of $2.34 billion.

Insight Enterprises (NSIT) vs. S&P 500 (SPY)

Market Cap

$4.21B

Dividend YieldN/A

Average Volume (3M)423.94K

Price to Earnings (P/E)20.2

Beta (1Y)1.18

Revenue Growth-5.17%

EPS Growth-9.73%

CountryUS

Employees14,324

SectorTechnology

Sector Strength44

IndustryTechnology Distributors

Share Statistics

EPS (TTM)6.52

Shares Outstanding31,910,334

10 Day Avg. Volume332,375

30 Day Avg. Volume423,943

Financial Highlights & Ratios

PEG Ratio1.32

Price to Book (P/B)N/A

Price to Sales (P/S)0.56

Price to Cash Flow (P/CF)5.70

P/FCF Ratio5.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$159.00

Price Target Upside20.38% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Insight Enterprises Business Overview & Revenue Model

Company DescriptionInsight Enterprises, Inc. (NSIT) is a leading global provider of information technology solutions that help organizations design, build, and manage their IT environments. Operating across multiple sectors including healthcare, finance, retail, and government, Insight delivers a wide range of products and services such as cloud solutions, data center optimization, networking, and digital transformation services. With a focus on innovation and customer satisfaction, Insight empowers businesses to navigate the complexities of the digital landscape.

How the Company Makes MoneyInsight Enterprises generates revenue through a diverse array of services and products that cater to the IT needs of businesses worldwide. The company's primary revenue streams include the sale of software and hardware products, which encompass everything from data center equipment to personal computing devices. Additionally, Insight provides a comprehensive suite of IT services, including consulting, integration, and managed services, which contribute significantly to its earnings. The company also benefits from strategic partnerships with major technology vendors like Microsoft, Cisco, and Dell, which enhance its product offerings and market reach. Insight's ability to provide end-to-end solutions tailored to client needs is a key factor in its financial success.

Insight Enterprises Financial Statement Overview

Summary

Insight Enterprises presents a solid financial profile with strong profitability and cash flow management. Despite recent declines in revenue and net income, the company's operational efficiency and cash flow generation provide a stable financial footing. Continued focus on revenue growth and maintaining a balanced leverage will be crucial for sustained financial health.

Income Statement

Positive

Insight Enterprises shows a strong gross profit margin with consistent profitability across recent years. Despite a slight decrease in revenue over the past year, the company maintains healthy EBIT and EBITDA margins, indicating operational efficiency. However, the recent decline in net income and revenue growth rate suggests potential challenges in sustaining top-line growth.

Balance Sheet

Positive

The company's balance sheet reflects a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. The return on equity remains stable, indicating efficient use of equity. However, the equity ratio shows a reliance on liabilities, which could pose risk if not managed carefully.

Cash Flow

Very Positive

Insight Enterprises demonstrates robust cash flow management, with significant free cash flow and operating cash flow exceeding net income. The company has shown consistent growth in free cash flow, reinforcing its ability to generate cash sustainably. This strength in cash flow management provides a solid foundation for future investments and debt servicing.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
8.70B	9.18B	10.43B	9.44B	8.34B
	Gross Profit
1.77B	1.67B	1.64B	1.45B	1.30B
	EBIT
388.58M	419.80M	413.70M	332.06M	271.57M
	EBITDA
388.58M	481.45M	476.52M	385.85M	351.74M
	Net Income Common Stockholders
249.69M	281.31M	280.61M	219.34M	172.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
259.23M	268.73M	163.64M	103.84M	128.31M
	Total Assets
6.38B	6.29B	5.11B	4.69B	4.31B
	Total Debt
864.11M	1.17B	637.90M	361.61M	438.69M
	Net Debt
604.88M	903.64M	474.26M	257.77M	310.37M
	Total Liabilities
4.61B	4.55B	3.47B	3.18B	2.97B
	Stockholders Equity
1.77B	1.74B	1.64B	1.51B	1.34B
Cash Flow		Free Cash Flow
586.06M	580.28M	27.17M	111.63M	331.40M
	Operating Cash Flow
632.85M	619.53M	98.11M	163.71M	355.58M
	Investing Cash Flow
-303.28M	-505.20M	-137.84M	-21.07M	9.71M
	Financing Cash Flow
-321.27M	-16.71M	114.01M	-161.38M	-361.79M

Insight Enterprises Technical Analysis

Technical Analysis Sentiment

Negative

Last Price132.08

Price Trends

50DMA

151.49

Negative

100DMA

156.44

Negative

200DMA

178.86

Negative

Market Momentum

MACD

-5.95

Positive

RSI

34.36

Neutral

STOCH

46.64

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSIT, the sentiment is Negative. The current price of 132.08 is below the 20-day moving average (MA) of 141.40, below the 50-day MA of 151.49, and below the 200-day MA of 178.86, indicating a bearish trend. The MACD of -5.95 indicates Positive momentum. The RSI at 34.36 is Neutral, neither overbought nor oversold. The STOCH value of 46.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NSIT.

Insight Enterprises Risk Analysis

Insight Enterprises disclosed 25 risk factors in its most recent earnings report. Insight Enterprises reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Insight Enterprises Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SCSC	71 Outperform	$732.53M	12.30	6.79%	―	-15.92%	-25.15%
AVT	69 Neutral	$4.06B	13.30	6.45%	2.75%	-12.21%	-51.31%
CNXN	68 Neutral	$1.52B	17.93	9.94%	0.75%	-1.70%	4.45%
ARW	67 Neutral	$5.30B	14.05	6.78%	―	-15.66%	-54.03%
SNX	65 Neutral	$8.87B	13.21	8.40%	1.55%	4.62%	16.28%
NSIT	61 Neutral	$4.21B	20.24	14.24%	―	-5.17%	-9.73%
Sector *	58 Neutral	$9.82B	10.00	-6.63%	3.09%	7.49%	-11.58%

* Technology Sector Average

Performance Comparison

NSIT

Insight Enterprises

132.08

-54.19

-29.09%

ARW

Arrow Electronics

102.21

-22.81

-18.25%

AVT

Avnet

46.94

-0.32

-0.68%

CNXN

PC Connection

59.92

-4.68

-7.24%

SCSC

ScanSource

31.22

-13.23

-29.76%

SNX

SYNNEX

103.05

-11.24

-9.83%

Insight Enterprises Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -24.09% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

Insight Enterprises faced a challenging year with revenue declines and significant impacts from cloud program changes. Despite these challenges, the company achieved growth in core services, expanded gross margins, and maintained strong cash flow. Strategic partnerships have been strengthened, and cost management initiatives resulted in substantial savings. However, the overall financial performance was mixed, with some areas of growth offset by declines in revenue and increased expenses.

Highlights

Gross Profit and Margin Growth

Gross profit increased by 1%, driven by a 12% growth in Insight Core Services, and gross margin expanded by 170 basis points to 21.2%.

Strong Cash Flow

Cash flow from operations was $215 million for Q4 2024 and $633 million for the full year, marking the second consecutive year with over $600 million in cash flow.

Cloud and Core Services Growth

Cloud gross profit grew by 21%, and Insight Core Services gross profit increased by 15% for the full year.

Strategic Partnerships and Awards

Insight received numerous awards from partners like Microsoft and Google and entered into new strategic agreements with Microsoft, Google, and AWS.

Successful Cost Management

Completed SG&A actions resulting in approximately $25 million in annualized reductions.

Lowlights

Revenue Decline

Net revenue decreased by 7% in Q4 and 5% for the full year, primarily due to a 10% decline in product revenue.

Challenges in Hardware and Software

Hardware revenue declined by 2%, and on-prem software was down 23%, with product gross profit down due to partner consolidations.

Impact of Cloud Program Changes

Facing $70 million impact due to changes in Google Enterprise resale and Microsoft enterprise agreements, leading to anticipated flat to slightly down cloud revenue.

Interest Expense Increase

Interest expenses increased primarily related to recent acquisitions and share buybacks, impacting adjusted diluted EPS, which was down 11% for Q4.

Company Guidance

During Insight Enterprises' fourth quarter 2024 earnings call, the company reported a 1% increase in gross profit, driven by a 12% rise in Insight Core Services. Gross margin expanded by 170 basis points to 21.2%, and adjusted diluted earnings per share reached $2.66. The company generated $215 million in cash flow from operations and completed SG&A actions resulting in $25 million in annualized reductions. For 2025, Insight anticipates mid-single-digit growth in hardware gross profit, with Insight Core Services expected to grow within the 16% to 20% range. Adjusted diluted EPS is projected to be between $9.70 and $10.10, with an expected gross margin of approximately 20%. Challenges include a $70 million impact from cloud partner program changes and increased interest expenses due to convertible note settlements. Despite these challenges, the company plans to leverage its enhanced service capabilities and expects increased traction from AI investments to drive further growth.

Insight Enterprises Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Insight Enterprises Announces Board Member Retirement

Neutral

Apr 3, 2025

On March 28, 2025, Alexander Baum announced his retirement from the Board of Directors of Insight Enterprises, effective at the 2025 Annual Meeting. His departure will result in a reduction of the Board size to 10 directors. The company has also entered into a letter agreement with ValueAct Capital Management to continue sharing confidential information for strategic consultations, indicating ongoing collaboration and strategic alignment.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.