What Happened?
Shares of technology distribution company ScanSource (NASDAQ: SCSC) fell 16.8% in the pre-market session after the company reported disappointing fourth-quarter results and provided a weaker-than-expected full-year forecast.
ScanSource announced quarterly revenue of $766.5 million and earnings of $0.80 per share, both falling short of analyst expectations. The earnings figure also marked a decrease from the $0.85 per share reported in the same quarter of the previous year. Compounding the disappointing results, the company issued a weak financial outlook for the full year. ScanSource's revenue guidance of around $3.05 billion at the midpoint was approximately 3% below what analysts had anticipated. The combination of missing current financial targets and providing a downbeat forecast prompted a negative reaction from investors.
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What Is The Market Telling Us
ScanSource’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for ScanSource and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 4.6% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
ScanSource is down 6% since the beginning of the year, and at $36.71 per share, it is trading 19.1% below its 52-week high of $45.40 from September 2025. Investors who bought $1,000 worth of ScanSource’s shares 5 years ago would now be looking at an investment worth $1,257.
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