ScanSource (SCSC) AI Stock Analysis

• Market Cap: $972.71M
• Dividend Yield: N/A
• Average Volume (3M): 149.35K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 1.29
• 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: 21,942,503
• 10 Day Avg. Volume: 183,468
• 30 Day Avg. Volume: 149,355
• 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: 0.70
• Enterprise Value/Revenue: 0.23
• Enterprise Value/Gross Profit: 1.64
• Enterprise Value/Ebitda: 5.04
• 1Y Price Target: $43.00
• Price Target Upside: -3.00% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $48.00 ▲(8.28% Upside)

Score is driven primarily by mixed financial performance (stable leverage and returns but weak growth and cash flow trends). Technicals are supportive with the stock trading above major moving averages, though momentum looks stretched. Valuation is reasonable on P/E. Earnings call signals steady execution and strong Intelisys economics, but lowered guidance and near-term margin/deal timing risks cap the upside.

Positive Factors

Low Leverage / Strong Balance Sheet

ScanSource's very low debt-to-equity (0.16) and healthy equity ratio give it durable financial flexibility. Low leverage reduces refinancing and interest risk, supports ongoing buybacks, M&A and working-capital needs, and provides a buffer against cyclical distribution volatility.

High‑Margin Recurring Business (Intelisys)

Intelisys delivers outsized profitability and large billings, creating a durable high-margin recurring revenue base. Its scale and cloud/subscription orientation increase stickiness with channel partners and provide structural margin and cash generation that can offset lower-margin hardware distribution.

Solid Cash Generation Targets & Capital Flexibility

Management's maintained free cash flow target and a near-zero net debt position underpin persistent cash generation capacity. Combined with an active buyback program and a new five‑year credit facility, the company has durable liquidity to fund strategic investments, acquisitions, and returns.

Negative Factors

Negative Revenue Trend

A sustained negative revenue trend reduces scale benefits in distribution and pressurizes gross profit and vendor economics. If top-line contraction persists, it will constrain investment in enablement, limit pricing leverage with vendors, and make margin recovery harder over the medium term.

Thin Net Margins & Cash Conversion Weakness

Low net margins leave little cushion versus cyclical cost swings. The steep decline in free cash flow growth and noted operating cash-to-income weakness suggest conversion risk; this constrains reinvestment capacity and increases sensitivity to working capital swings inherent in distribution models.

Deal‑timing, Regional & Supply Risks

Dependence on large deals and lumpy invoicing undermines revenue visibility and can force guidance resets. Regional supplier loss and a -9% Brazil decline reduce diversification, while industry memory shortages pose structural availability and margin risks—all of which can persistently hamper growth and margins.

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

Stable balance sheet with low leverage (debt-to-equity 0.16) and moderate profitability (ROE 7.88%), but pressured business trends: negative revenue growth, low net margin (2.35%), and weak free cash flow growth (-20.79%) with cash conversion concerns.

Income Statement

ScanSource's income statement shows a mixed performance. The gross profit margin is relatively stable at around 13.4%, indicating consistent cost management. However, the net profit margin is low at 2.35%, suggesting limited profitability. The revenue growth rate is negative, reflecting a decline in sales, which is a concern. EBIT and EBITDA margins are modest, indicating average operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.16, indicating low leverage and reduced financial risk. Return on equity is moderate at 7.88%, showing decent profitability relative to shareholder equity. The equity ratio is healthy, suggesting a strong capital structure.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth at -20.79%. The operating cash flow to net income ratio is low, indicating potential issues in converting income into cash. However, the free cash flow to net income ratio is strong at 0.93, showing effective cash generation relative to net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.00B	3.04B	3.26B	3.79B	3.53B	3.15B
Gross Profit	414.50M	408.65M	399.05M	449.24M	426.52M	350.72M
EBITDA	135.17M	132.60M	140.88M	164.50M	155.06M	104.76M
Net Income	74.45M	71.55M	77.06M	89.81M	88.80M	10.79M
Balance Sheet
Total Assets	1.72B	1.79B	1.78B	2.07B	1.94B	1.67B
Cash, Cash Equivalents and Short-Term Investments	124.92M	126.16M	185.46M	36.18M	37.99M	62.72M
Total Debt	7.87M	147.11M	153.96M	343.58M	288.75M	164.01M
Total Liabilities	802.94M	879.20M	854.78M	1.16B	1.13B	940.49M
Stockholders Equity	914.03M	906.41M	924.25M	905.30M	806.53M	731.19M
Cash Flow
Free Cash Flow	82.42M	104.06M	363.09M	-45.75M	-131.20M	138.58M
Operating Cash Flow	90.73M	112.35M	371.65M	-35.77M	-124.35M	140.94M
Investing Cash Flow	-5.56M	-62.39M	9.04M	-8.26M	-3.72M	31.93M
Financing Cash Flow	-107.22M	-110.91M	-227.77M	39.53M	108.11M	-148.32M

ScanSource Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 44.33 is above the 20-day moving average (MA) of 41.62, above the 50-day MA of 41.07, and above the 200-day MA of 41.12, indicating a bullish trend. The MACD of 0.82 indicates Negative momentum. The RSI at 67.49 is Neutral, neither overbought nor oversold. The STOCH value of 86.27 is Negative, 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
CNXN	73 Outperform	$1.52B	18.15	9.30%	1.02%	3.19%	-4.91%
AVT	71 Outperform	$5.24B	25.80	4.71%	2.77%	-2.30%	-29.75%
SNX	71 Outperform	$13.27B	16.20	9.95%	1.15%	6.95%	19.19%
SCSC	68 Neutral	$972.71M	13.82	8.11%	―	-4.88%	2.57%
ARW	64 Neutral	$7.11B	15.23	7.70%	―	3.16%	1.09%
NSIT	62 Neutral	$2.53B	19.04	8.51%	―	-6.69%	-51.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.