ScanSource (SCSC) AI Stock Analysis

• Market Cap: $877.61M
• Dividend Yield: N/A
• Average Volume (3M): 209.17K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 1.25
• Revenue Growth: -14.07%
• EPS Growth: -9.65%
• Country: US
• Employees: 2,300
• Sector: Technology
• Sector Strength: 98
• Industry: Technology Distributors
• EPS (TTM): 0.86
• Shares Outstanding: 22,595,608
• 10 Day Avg. Volume: 210,351
• 30 Day Avg. Volume: 209,168
• PEG Ratio: 1.55
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.18
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 0.08
• Enterprise Value/Gross Profit: 2.37
• Enterprise Value/Ebitda: 1.85
• 1Y Price Target: $48.50
• Price Target Upside: 24.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 69 Neutral
• Price Target: $45.00 ▲(15.86%Upside)

ScanSource's overall score reflects strong financial stability and positive earnings call highlights, including profitability improvements and cash flow strength. However, technical indicators and valuation suggest moderate growth expectations, and sales declines pose a risk.

ScanSource Business Overview & Revenue Model

Company Description

ScanSource, Inc. distributes technology products and solutions in the United States, Canada, and internationally. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, intrusion-related, and wireless and networking infrastructure products. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

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 shows a stable financial position with strong balance sheet and healthy cash flow generation. The balance sheet reflects a low debt-to-equity ratio, indicating conservative leverage. However, revenue growth has slowed, and profitability margins are modest, suggesting a need for improvement to enhance financial performance.

Income Statement

ScanSource's income statement shows mixed results. The gross profit margin for the TTM is approximately 13.3%, slightly lower than previous years, indicating stable but not improving profitability. The net profit margin is about 2.3% for the TTM, which is modest. Revenue has decreased from previous periods, showing a negative growth trend. EBIT and EBITDA margins are 2.7% and 4.3% respectively, indicating stable operational efficiency but with room for improvement.

Balance Sheet

The balance sheet reflects strong equity with an equity ratio of approximately 52.3% in the TTM. The debt-to-equity ratio is very low at around 0.15, indicating conservative leverage. ROE is lower at 7.5% for the TTM, signaling moderate profitability relative to equity but stable financial health overall.

Cash Flow

Cash flow analysis shows robust free cash flow generation with positive growth in the TTM. The operating cash flow to net income ratio is strong, indicating healthy cash generation relative to reported earnings. The free cash flow to net income ratio is very favorable, suggesting effective cash management and potential for future investments or debt reduction.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	2.97B	3.26B	3.79B	3.53B	3.15B	3.05B
Gross Profit	394.35M	399.05M	449.24M	426.52M	350.72M	355.57M
EBITDA	127.47M	140.91M	170.29M	155.06M	97.98M	-24.22M
Net Income	67.55M	77.06M	89.81M	88.80M	45.39M	-79.23M
Balance Sheet
Total Assets	1.73B	1.78B	2.07B	1.94B	1.67B	1.69B
Cash, Cash Equivalents and Short-Term Investments	146.29M	185.46M	36.18M	37.99M	62.72M	29.48M
Total Debt	138.02M	153.96M	334.26M	271.17M	143.17M	218.73M
Total Liabilities	823.46M	854.78M	1.16B	1.13B	940.49M	1.01B
Stockholders Equity	901.75M	924.25M	905.30M	806.53M	731.19M	678.25M
Cash Flow
Free Cash Flow	152.40M	363.09M	-45.75M	-131.20M	138.58M	219.88M
Operating Cash Flow	159.44M	371.65M	-35.77M	-124.35M	140.94M	226.27M
Investing Cash Flow	-61.52M	9.04M	-8.26M	-3.72M	31.93M	-55.38M
Financing Cash Flow	-107.25M	-227.77M	39.53M	108.11M	-148.32M	-156.61M

ScanSource Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 38.84
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• 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 Negative. The current price of 38.84 is below the 20-day moving average (MA) of 41.20, below the 50-day MA of 41.14, and below the 200-day MA of 42.11, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 34.50 is Neutral, neither overbought nor oversold. The STOCH value of 21.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCSC.

ScanSource Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNX	78 Outperform	$11.91B	16.88	8.83%	1.19%	6.60%	19.93%
SCSC	69 Neutral	$877.61M	14.00	7.32%	―	-14.07%	-9.65%
CNXN	69 Neutral	$1.56B	18.73	9.78%	0.81%	4.94%	-1.79%
NSIT	69 Neutral	$4.68B	28.93	8.67%	―	-7.61%	-50.01%
AVT	68 Neutral	$4.44B	14.84	6.42%	2.49%	-10.52%	-42.40%
ARW	65 Neutral	$6.02B	13.11	7.74%	―	-3.95%	-16.72%
Sector *	57 Neutral	HK$13.66B	5.74	-5.77%	5.14%	9.65%	-43.80%

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.