Let’s dig into the relative performance of Connection (NASDAQ:CNXN) and its peers as we unravel the now-completed Q1 it distribution & solutions earnings season.
IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.
The 7 it distribution & solutions stocks we track reported a mixed Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 7.8% on average since the latest earnings results.
Best Q1: Connection (NASDAQ:CNXN)
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Connection reported revenues of $701 million, up 10.9% year on year. This print exceeded analysts’ expectations by 8.5%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates.
Connection Total Revenue
Connection achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 13.9% since reporting and currently trades at $70.64.
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
CDW reported revenues of $5.20 billion, up 6.7% year on year, outperforming analysts’ expectations by 5.3%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates.
CDW Total Revenue
The market seems happy with the results as the stock is up 16.3% since reporting. It currently trades at $190.68.
Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ:SCSC) is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers.
ScanSource reported revenues of $704.8 million, down 6.3% year on year, falling short of analysts’ expectations by 9.4%. It was a slower quarter as it posted full-year revenue guidance missing analysts’ expectations.
ScanSource delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 16.7% since the results and currently trades at $42.06.
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE:SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
TD SYNNEX reported revenues of $14.53 billion, up 4% year on year. This print lagged analysts' expectations by 1.7%. It was a softer quarter with a miss of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $124.92.
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ:NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Insight Enterprises reported revenues of $2.10 billion, down 11.6% year on year. This number came in 5.9% below analysts' expectations. It was a softer quarter as it also produced a miss of analysts’ EPS estimates.
Insight Enterprises had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $138.45.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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