What Happened?
Shares of IT solutions provider Connection (NASDAQ: CNXN) fell 1.4% in the morning session after the company reported third-quarter 2025 financial results that missed Wall Street's expectations on both the top and bottom lines. The company's revenue fell 2.2% year over year to $709.1 million, falling short of the $743.7 million analysts had anticipated. Similarly, adjusted earnings per share came in at $0.97, missing the consensus estimate of $1.01. While the company's operating margin of 4.3% was stable compared to the same quarter last year, this was not enough to offset the dual misses. The weaker-than-expected performance in both sales and profitability signaled a challenging quarter, prompting a negative reaction from investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Connection? Access our full analysis report here.
What Is The Market Telling Us
Connection’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 5.5% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Connection is down 14.7% since the beginning of the year, and at $58.69 per share, it is trading 22.2% below its 52-week high of $75.45 from December 2024. Investors who bought $1,000 worth of Connection’s shares 5 years ago would now be looking at an investment worth $1,288.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.
