As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the it distribution & solutions industry, including ScanSource (NASDAQ: SCSC) and its peers.
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 8 it distribution & solutions stocks we track reported a slower Q4. As a group, revenues missed analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 14.1% since the latest earnings results.
ScanSource (NASDAQ: SCSC)
Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ: SCSC) is a hybrid technology distributor that connects hardware, software, and cloud services from leading tech suppliers to resellers and business customers.
ScanSource reported revenues of $747.5 million, down 15.5% year on year. This print fell short of analysts’ expectations by 11.8%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates.
ScanSource delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 28.1% since reporting and currently trades at $35.89.
Read our full report on ScanSource here, it’s free.
Best Q4: CDW (NASDAQ: CDW)
Starting as a small computer discount warehouse in 1984 before evolving into a tech solutions powerhouse, CDW (NASDAQGS: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 $5.19 billion, up 3.3% year on year, outperforming analysts’ expectations by 2.9%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 17.8% since reporting. It currently trades at $164.06.
Is now the time to buy CDW? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: ePlus (NASDAQ: PLUS)
Starting as MLC Holdings in 1990 before rebranding in 1999, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
ePlus reported revenues of $511 million, flat year on year, falling short of analysts’ expectations by 7.7%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 21% since the results and currently trades at $63.99.
Read our full analysis of ePlus’s results here.
Insight Enterprises (NASDAQ: NSIT)
With over 35 years of IT expertise and a presence across North America, Europe, and Asia-Pacific, Insight Enterprises (NASDAQ: NSIT) is a technology solutions provider that helps businesses modernize their IT infrastructure, implement cybersecurity, and leverage data and artificial intelligence.
Insight Enterprises reported revenues of $2.07 billion, down 7.3% year on year. This number came in 4.7% below analysts' expectations. It was a disappointing quarter as it also recorded a significant miss of analysts’ full-year EPS guidance estimates and a miss of analysts’ EPS estimates.
The stock is down 11.9% since reporting and currently trades at $153.19.
Read our full, actionable report on Insight Enterprises here, it’s free.
Connection (NASDAQ: CNXN)
Originally founded in 1982 as PC Connection before evolving into a comprehensive technology partner, Connection (NASDAQ: CNXN) is an IT solutions provider that helps businesses and government agencies design, implement, and support their technology environments.
Connection reported revenues of $708.9 million, up 1.8% year on year. This result missed analysts’ expectations by 1%. Overall, it was a disappointing quarter as it also logged a significant miss of analysts’ EPS estimates.
The stock is down 15.3% since reporting and currently trades at $60.68.
Read our full, actionable report on Connection here, it’s free.
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