ScanSource Inc (SCSC)
NASDAQ:SCSC
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ScanSource
(NASDAQ:SCSC)
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Rating:69Neutral
Price Target:
$50.00
▲(30.24% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by a significantly de-risked balance sheet and solid positive free cash flow, supported by a reasonable P/E. Offsetting factors include thin distributor margins and a more cautious near-term outlook from the guidance reset, while technicals show an uptrend but with overbought conditions that raise pullback risk.
Positive Factors
Very low leverage / strong balance sheet
Near-zero net leverage and stable equity give ScanSource durable financial flexibility. A minimal debt load supports ongoing buybacks, M&A optionality, and resilience through distribution cycles, reducing refinancing risk and enabling capital allocation that sustains long-term strategy.
Negative Factors
Thin distributor margins
The distribution model inherently compresses margins; modest net and EBITDA margins leave limited buffer against cost increases or demand softness. Sustaining investment in growth initiatives while preserving margins poses an ongoing structural challenge to profitability and return stability.
Read all positive and negative factors
Positive Factors
Negative Factors
Very low leverage / strong balance sheet
Near-zero net leverage and stable equity give ScanSource durable financial flexibility. A minimal debt load supports ongoing buybacks, M&A optionality, and resilience through distribution cycles, reducing refinancing risk and enabling capital allocation that sustains long-term strategy.
Read all positive factors
ScanSource (SCSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$873.35M
Dividend YieldN/A
Average Volume (3M)241.53K
Price to Earnings (P/E)11.4
Beta (1Y)1.32
Revenue Growth3.76%
EPS Growth18.30%
CountryUS
Employees2,300
SectorTechnology
Sector Strength88
IndustryTechnology Distributors
Share Statistics
EPS (TTM)3.30
Shares Outstanding20,324,530
10 Day Avg. Volume319,333
30 Day Avg. Volume241,533
Financial Highlights & Ratios
PEG Ratio-8.49
Price to Book (P/B)1.08
Price to Sales (P/S)0.32
P/FCF Ratio9.42
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit1.79
Enterprise Value/Ebitda5.81
Forecast
1Y Price Target
$43.00Price Target Upside12.01% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)3.95
Revenue Forecast (FY)$3.07B
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 Solution...
How the Company Makes Money
ScanSource primarily makes money by purchasing technology products from suppliers (original equipment manufacturers and software vendors) and reselling them to its channel partners at a markup, generating revenue largely from product sales recorde...
ScanSource Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Neutral
The call presented a mix of steady operational and financial strengths (modest sales growth, strong Intelisys margins and billings, solid free cash flow, healthy balance sheet, accretive acquisitions, and a strategic go-to-market change) alongside tangible near-term headwinds (one-time period expenses, weaker large-deal invoicing/timing, a 9% decline in Brazil, and potential supply risk). Management lowered annual guidance relative to prior expectations but maintained free cash flow targets and emphasized confidence in multi-year strategic goals.Positive Updates
Modest Net Sales Growth
Company-wide Q2 net sales grew 3% year-over-year across both segments, with the Specialty Technology Solutions and Intelisys & Advisory segments each reporting 3% YoY sales growth.
Negative Updates
Profitability Impact from Period Expenses
Profitability was negatively impacted by unexpected period expenses in Q2 (freight, unfavorable mix) and a customer-specific bad debt reserve, causing declines in gross profit and EBITDA margins versus a very strong prior quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Modest Net Sales Growth
Company-wide Q2 net sales grew 3% year-over-year across both segments, with the Specialty Technology Solutions and Intelisys & Advisory segments each reporting 3% YoY sales growth.
Read all positive updates
Company Guidance
ScanSource updated FY2026 guidance, now forecasting full-year revenue of $3.0–$3.1 billion and adjusted EBITDA of $140–$150 million while maintaining an annual free cash flow target of at least $80 million; this reflects first-half performance (gross profit margin close to 14% and adjusted EBITDA margin over 4.6%). In Q2, net sales grew 3% YoY in both segments and gross profit rose 1% YoY; Specialty net sales were +3% YoY (+4% QoQ), specialty adjusted EBITDA margin was 2.8% (impacted ~60 bps) and recurring revenues comprised ~18% of that segment’s gross profit (higher period costs reduced GP margin by ~30 bps). Intelisys annual net billings are ~$2.85 billion with a segment adjusted EBITDA margin of ~41%. The company ended Q2 with about $83 million in cash, net debt leverage of ~0x on trailing‑12‑month adjusted EBITDA, adjusted ROIC of 11.9% for the quarter (13.3% for the year), repurchased $18 million in the quarter (≈$40 million H1) with $179 million remaining authorization, and closed a new five‑year credit facility; management’s outlook assumes a second‑half pickup in large deals and continued Intelisys investment to convert faster‑growing new orders into future billings.ScanSource Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
82
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.09B | 3.04B | 3.26B | 3.79B | 3.53B | 3.15B |
| Gross Profit | 416.89M | 408.65M | 399.05M | 449.24M | 426.52M | 350.72M |
| EBITDA | 128.35M | 132.60M | 140.88M | 164.50M | 155.06M | 104.76M |
| Net Income | 73.35M | 71.55M | 77.06M | 89.81M | 88.80M | 10.79M |
Balance Sheet | ||||||
| Total Assets | 1.81B | 1.79B | 1.78B | 2.07B | 1.94B | 1.67B |
| Cash, Cash Equivalents and Short-Term Investments | 120.30M | 126.16M | 185.46M | 36.18M | 37.99M | 62.72M |
| Total Debt | 2.87M | 147.11M | 153.96M | 343.58M | 288.75M | 164.01M |
| Total Liabilities | 899.50M | 879.20M | 854.78M | 1.16B | 1.13B | 940.49M |
| Stockholders Equity | 906.26M | 906.41M | 924.25M | 905.30M | 806.53M | 731.19M |
Cash Flow | ||||||
| Free Cash Flow | 123.76M | 104.06M | 363.09M | -45.75M | -131.20M | 138.58M |
| Operating Cash Flow | 133.05M | 112.35M | 371.65M | -35.77M | -124.35M | 140.94M |
| Investing Cash Flow | -27.51M | -62.39M | 9.04M | -8.26M | -3.72M | 31.93M |
| Financing Cash Flow | -134.51M | -110.91M | -227.77M | 39.53M | 108.11M | -148.32M |
ScanSource Technical Analysis
Positive
38.39
Price Trends
38.94
Positive
39.02
Positive
40.63
Positive
Market Momentum
1.10
Positive
55.47
Neutral
29.47
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 38.39 is below the 20-day moving average (MA) of 41.90, below the 50-day MA of 38.94, and below the 200-day MA of 40.63, indicating a bullish trend. The MACD of 1.10 indicates Positive momentum. The RSI at 55.47 is Neutral, neither overbought nor oversold. The STOCH value of 29.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCSC.
ScanSource Risk Analysis
ScanSource disclosed 24 risk factors in its most recent earnings report. ScanSource 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
ScanSource Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $10.63B | 7.96 | 11.15% | ― | 20.49% | 92.31% | |
75 Outperform | $18.32B | 9.59 | 11.60% | 1.15% | 10.39% | 50.26% | |
74 Outperform | $1.65B | 21.38 | 9.67% | 1.02% | 0.78% | 3.87% | |
69 Neutral | $873.35M | 11.45 | 8.07% | ― | 3.76% | 18.30% | |
64 Neutral | $2.74B | 17.19 | 11.17% | ― | -1.83% | -2.39% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $6.84B | 12.98 | 4.33% | 2.77% | 12.68% | -27.94% |
* Technology Sector Average
SCSC
ScanSource
42.48
2.90
7.33%
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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.