ScanSource (SCSC) AI Stock Analysis

• Market Cap: $777.38M
• Dividend Yield: N/A
• Average Volume (3M): 219.99K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 1.34
• Revenue Growth: -4.88%
• EPS Growth: 2.57%
• Country: US
• Employees: 2,300
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.80
• Shares Outstanding: 21,480,385
• 10 Day Avg. Volume: 216,747
• 30 Day Avg. Volume: 219,989
• PEG Ratio: -8.49
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.32
• P/FCF Ratio: 9.42
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 2.06
• Enterprise Value/Ebitda: 6.38
• 1Y Price Target: $43.00
• Price Target Upside: 12.01% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 4.23
• Revenue Forecast (FY): $3.12B

• Rating: 67 Neutral
• Price Target: $39.00 ▲(1.59% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is supported by strong financial quality (notably the de-risked balance sheet and improved TTM performance) and a relatively low P/E. Offsetting factors are weak technicals with the stock trading below major moving averages and a more cautious near-term outlook after the guidance reset despite maintained free-cash-flow targets.

Positive Factors

De‑risked balance sheet

Extremely low reported debt and a debt-to-equity near 0.01 provide durable financial flexibility. This conservative capital structure reduces refinancing and liquidity risk, supports consistent buybacks and M&A optionality, and underpins resilience through economic cycles.

Strong free cash flow generation

High and improving free cash flow, with FCF roughly 0.91x net income, demonstrates the business converts earnings to cash sustainably. Persistent positive FCF supports reinvestment, dividends/buybacks, debt paydown, and strategic investments over the medium term.

High‑margin recurring Intelisys business

Intelisys contributes large, high‑margin recurring billings and attractive segment profitability. Its scale and margin profile diversify ScanSource away from low‑margin hardware distribution and provide a durable earnings and cash‑flow anchor as cloud adoption grows.

Negative Factors

Thin distribution margins

Distribution economics remain structurally low margin, leaving profitability highly sensitive to price pressure, product mix shifts, and volume swings. Limited margin buffer increases risk that modest adverse trends can erode earnings and free cash flow sustainability.

Historical cash‑flow cyclicality

Past episodes of negative operating and free cash flow show underlying sensitivity to end‑market cycles and working capital dynamics. While current FCF is strong, this volatility suggests less predictability across economic swings and higher monitoring of working capital risk.

Large‑deal timing & regional weakness

Dependence on lumpy large deals and exposure to challenging regional markets (Brazil decline, supplier losses) make revenue and margin visibility weaker. Timing variability in big contracts can depress near‑term billings and force conservative guidance, hindering planning.

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 primarily through the distribution of technology products and solutions. Its revenue model is centered on purchasing products from manufacturers at wholesale prices and then reselling them to resellers and end-users at a markup. Key revenue streams include sales of hardware and accessories, software solutions, and related services such as training and technical support. The company also benefits from strong partnerships with leading manufacturers, which allows it to offer a diverse product portfolio and leverage joint marketing initiatives. Additionally, ScanSource's focus on value-added services, such as logistics and integration support, enhances its offering and contributes to recurring revenue streams, positioning it for sustainable growth in the technology distribution market.

ScanSource Financial Statement Overview

Summary

Strong balance sheet with minimal debt (debt-to-equity ~0.01) and solid equity base supports resilience. TTM revenue rebound is significant (+63.3%) and profitability is steady but thin (net margin ~2.5%), leaving limited buffer if volumes soften. Free cash flow is currently strong and growing, but historical cash-flow volatility remains a key risk.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded sharply (+63.3%) after two consecutive annual declines (2025: -6.7%, 2024: -13.9%), signaling a meaningful re-acceleration in demand. Profitability is steady but structurally thin: TTM gross margin is ~13.8% and net margin is ~2.5%, which is typical for distribution but leaves limited cushion if pricing or volumes soften. Operating profitability is consistent (TTM EBIT margin ~3.5%; EBITDA margin ~4.5%), with a modest improvement versus the 2025 annual period, but overall earnings power remains volume-dependent.

Balance Sheet

Leverage improved dramatically: total debt is very low in TTM ($2.9M) versus prior annual periods (e.g., ~$147M in 2025), driving an exceptionally conservative debt load (TTM debt-to-equity ~0.01). Equity remains solid (~$911M TTM) and returns on equity are stable in the high-single-digits (~8% TTM), reflecting consistent profitability without heavy balance-sheet risk. The main watch item is that returns are not high, implying the business generates respectable but not outsized shareholder returns despite the strong capital structure.

Cash Flow

Cash generation is positive in TTM with operating cash flow of ~$128M and free cash flow of ~$119M, and free cash flow growth is very strong (TTM +44.9%). Free cash flow broadly tracks earnings (TTM free cash flow is ~0.91x net income), indicating earnings quality is reasonable. However, cash flow has shown meaningful volatility historically (negative operating and free cash flow in 2022–2023, then a large rebound in 2024), so durability across cycles remains a key risk to monitor.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	3.02B	3.04B	3.26B	3.79B	3.53B	3.15B
Gross Profit	409.97M	408.65M	399.05M	449.24M	426.52M	350.72M
EBITDA	132.65M	132.60M	140.88M	164.50M	155.06M	104.76M
Net Income	73.89M	71.55M	77.06M	89.81M	88.80M	10.79M
Balance Sheet
Total Assets	1.74B	1.79B	1.78B	2.07B	1.94B	1.67B
Cash, Cash Equivalents and Short-Term Investments	83.47M	126.16M	185.46M	36.18M	37.99M	62.72M
Total Debt	120.59M	147.11M	153.96M	343.58M	288.75M	164.01M
Total Liabilities	830.78M	879.20M	854.78M	1.16B	1.13B	940.49M
Stockholders Equity	910.89M	906.41M	924.25M	905.30M	806.53M	731.19M
Cash Flow
Free Cash Flow	119.45M	104.06M	363.09M	-45.75M	-131.20M	138.58M
Operating Cash Flow	127.76M	112.35M	371.65M	-35.77M	-124.35M	140.94M
Investing Cash Flow	-26.67M	-62.39M	9.04M	-8.26M	-3.72M	31.93M
Financing Cash Flow	-131.81M	-110.91M	-227.77M	39.53M	108.11M	-148.32M

ScanSource Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 38.39
• 50DMA: Negative
• 100DMA: Negative
• 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 38.39 is below the 20-day moving average (MA) of 38.75, below the 50-day MA of 39.87, and below the 200-day MA of 41.32, indicating a bearish trend. The MACD of -1.25 indicates Positive momentum. The RSI at 40.43 is Neutral, neither overbought nor oversold. The STOCH value of 54.69 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
CNXN	74 Outperform	$1.52B	18.41	9.30%	1.02%	3.19%	-4.91%
AVT	71 Outperform	$5.48B	27.41	4.71%	2.77%	-2.30%	-29.75%
SNX	71 Outperform	$12.68B	15.80	9.95%	1.15%	6.95%	19.19%
SCSC	67 Neutral	$777.38M	11.34	8.16%	―	-4.88%	2.57%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ARW	60 Neutral	$8.02B	14.10	7.70%	―	3.16%	1.09%
NSIT	59 Neutral	$2.57B	16.50	9.20%	―	-6.69%	-51.74%

ScanSource Corporate Events

ScanSource Posts Modest Q2 Growth and Governance Refresh

On February 5, 2026, ScanSource reported results for the second quarter ended December 31, 2025, posting a 2.5% year-over-year increase in net sales to $766.5 million and a 1.2% rise in gross profit to $102.9 million, even as gross margin, operating income and non-GAAP profitability declined modestly. Recurring revenue grew 15.9% year-over-year and accounted for a larger share of gross profit, while adjusted EBITDA and non-GAAP net income fell compared with the prior-year period; the company generated strong operating and free cash flow, held modest net debt, and repurchased $38.7 million of shares during the first half of fiscal 2026. In a parallel move to refine its governance structure, the board appointed Charles A. Mathis as lead independent director and chair of the nominating and corporate governance committee, with Vernon J. Nagel taking over as audit committee chair, while longtime director Peter C. Browning remained on the board and all committees, signaling continuity alongside refreshed oversight for investors and other stakeholders.

The most recent analyst rating on (SCSC) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on ScanSource stock, see the SCSC Stock Forecast page.

ScanSource discloses new direct financial obligation arrangement

The filing excerpt from ScanSource provides only a cross-reference statement indicating that information disclosed in another section is incorporated by reference, without offering substantive details about the company’s operations, the nature of the transaction, or its impact on stakeholders.

The most recent analyst rating on (SCSC) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on ScanSource stock, see the SCSC Stock Forecast page.

ScanSource Shareholders Approve Key Proposals at Annual Meeting

On December 9, 2025, ScanSource, Inc. held its annual meeting of shareholders, where 90.5% of issued shares were represented. Shareholders approved the election of eight directors, the compensation of named executive officers, and the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2026.

The most recent analyst rating on (SCSC) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on ScanSource stock, see the SCSC Stock Forecast page.