ScanSource (SCSC) AI Stock Analysis

• Market Cap: $947.60M
• Dividend Yield: N/A
• Average Volume (3M): 292.54K
• Price to Earnings (P/E): 14.4
• Beta (1Y): 1.30
• Revenue Growth: -6.72%
• EPS Growth: -1.14%
• Country: US
• Employees: 2,300
• Sector: Technology
• Sector Strength: 86
• Industry: Technology Distributors
• EPS (TTM): 1.02
• Shares Outstanding: 21,884,508
• 10 Day Avg. Volume: 244,449
• 30 Day Avg. Volume: 292,544
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: 2.39
• Enterprise Value/Ebitda: 7.37
• 1Y Price Target: $49.00
• Price Target Upside: 13.16% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: $49.00 ▲(13.16% Upside)

ScanSource's overall stock score reflects a solid financial foundation with consistent revenue growth and effective leverage management. The technical indicators suggest a positive trend, while the valuation remains reasonable. Despite some challenges highlighted in the earnings call, the company's strategic initiatives and growth prospects contribute positively to the score.

Positive Factors

Revenue Growth

The 9% year-over-year growth in net sales indicates strong demand and effective market strategies, which can drive long-term revenue expansion.

Gross Profit Margin Improvement

Improved gross profit margins reflect effective cost management and pricing strategies, enhancing profitability and competitive positioning over time.

Strategic Acquisitions

Successful acquisitions that enhance EPS and ROIC indicate strategic growth and diversification, strengthening the company's market position.

Negative Factors

Intelisys & Advisory Segment Challenges

Minimal growth in the Intelisys & Advisory segment suggests competitive pressures and operational challenges, potentially hindering overall profitability.

Full Year Net Sales Decline

A 6.7% decline in full-year net sales indicates potential market share loss or demand issues, impacting long-term revenue stability.

Competitive Pressures

Increased competition from PE-backed firms may pressure margins and require strategic investments, affecting long-term profitability.

ScanSource Business Overview & Revenue Model

Company Description

ScanSource, Inc. (SCSC) is a global provider of technology products and solutions, specializing in the distribution of specialty technology products and solutions for businesses. The company operates primarily in the technology and communications sectors, offering a wide range of products such as point-of-sale systems, barcode scanners, networking equipment, and communications solutions. ScanSource serves various markets, including retail, healthcare, education, and government sectors, by providing innovative hardware and software solutions that enhance operational efficiencies.

How the Company Makes Money

ScanSource generates revenue by acting as a distributor of technology products and solutions. The company makes money through the sale of hardware and software products to value-added resellers (VARs), system integrators, and service providers. Key revenue streams include the sale of point-of-sale systems, barcode and data capture solutions, networking equipment, and unified communications solutions. Additionally, ScanSource provides services such as technical support, training, and financing options to its partners, enhancing its value proposition. Significant partnerships with leading technology manufacturers and a vast distribution network are pivotal to ScanSource's earnings, enabling the company to offer a comprehensive range of products and solutions to its customers.

ScanSource Financial Statement Overview

Summary

ScanSource exhibits a solid financial position with consistent revenue growth and stable profitability. The company has effectively managed its leverage, resulting in a strong balance sheet. However, cash flow management presents some challenges, particularly in terms of free cash flow growth. Continued focus on operational efficiency and cash conversion will be crucial for sustaining financial health.

Income Statement

ScanSource has demonstrated consistent revenue growth over the years, with a notable improvement in gross profit margin from 11.13% in 2021 to 13.44% in 2025. The net profit margin has remained relatively stable, indicating effective cost management. However, the EBIT and EBITDA margins have shown slight fluctuations, suggesting some variability in operational efficiency.

Balance Sheet

The company maintains a healthy debt-to-equity ratio, which has decreased from 0.37 in 2023 to 0.16 in 2025, indicating improved leverage management. Return on equity has been stable, reflecting consistent profitability. The equity ratio is strong, suggesting a solid capital structure, but there is room for improvement in asset utilization.

Cash Flow

ScanSource's cash flow performance has been mixed, with a significant decline in free cash flow growth in 2025. The operating cash flow to net income ratio has decreased, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio remains robust, suggesting effective cash generation relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.04B	3.04B	3.26B	3.79B	3.53B	3.15B
Gross Profit	408.65M	408.65M	399.05M	449.24M	426.52M	350.72M
EBITDA	132.58M	132.60M	140.91M	170.29M	155.06M	97.98M
Net Income	71.55M	71.55M	77.06M	89.81M	88.80M	45.39M
Balance Sheet
Total Assets	1.79B	1.79B	1.78B	2.07B	1.94B	1.67B
Cash, Cash Equivalents and Short-Term Investments	126.16M	126.16M	185.46M	36.18M	37.99M	62.72M
Total Debt	147.11M	147.11M	153.96M	334.26M	271.17M	143.17M
Total Liabilities	879.20M	879.20M	854.78M	1.16B	1.13B	940.49M
Stockholders Equity	906.41M	906.41M	924.25M	905.30M	806.53M	731.19M
Cash Flow
Free Cash Flow	104.06M	104.06M	363.09M	-45.75M	-131.20M	138.58M
Operating Cash Flow	112.35M	112.35M	371.65M	-35.77M	-124.35M	140.94M
Investing Cash Flow	-62.39M	-62.39M	9.04M	-8.26M	-3.72M	31.93M
Financing Cash Flow	-110.91M	-110.91M	-227.77M	39.53M	108.11M	-148.32M

ScanSource Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCSC, the sentiment is Positive. The current price of 43.3 is below the 20-day moving average (MA) of 43.67, above the 50-day MA of 42.06, and above the 200-day MA of 41.41, indicating a neutral trend. The MACD of 0.64 indicates Positive momentum. The RSI at 51.11 is Neutral, neither overbought nor oversold. The STOCH value of 25.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCSC.

ScanSource Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNX	79 Outperform	$12.51B	17.73	8.83%	1.13%	6.60%	19.93%
CNXN	76 Outperform	$1.60B	19.21	9.78%	0.87%	4.94%	-1.79%
ARW	72 Outperform	$6.54B	14.36	7.74%	―	-3.95%	-16.72%
SCSC	71 Outperform	$947.60M	14.38	7.82%	―	-6.72%	-1.14%
AVT	67 Neutral	$4.50B	19.63	4.83%	2.45%	-6.55%	-49.61%
Sector *	61 Neutral	$36.70B	12.21	-10.39%	1.84%	8.50%	-7.32%
NSIT	61 Neutral	$3.96B	29.99	8.67%	―	-7.61%	-50.01%

ScanSource Corporate Events

ScanSource Shareholders Approve 2024 Incentive Plan and Directors

At its annual meeting, ScanSource, Inc. received shareholder approval for its 2024 Omnibus Incentive Compensation Plan, which replaces the 2021 Plan and includes various stock-based awards for employees, officers, and directors. The approval signifies continuity in the company’s incentive structure and reflects shareholder support for the proposed compensation plans and the election of directors, as well as the ratification of Grant Thornton LLP as independent auditors for fiscal 2025.