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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Reasons to Sell CNXN and 1 Stock to Buy Instead

CNXN Cover Image

Since March 2025, Connection has been in a holding pattern, posting a small loss of 1% while floating around $62.75. The stock also fell short of the S&P 500’s 15.6% gain during that period.

Is now the time to buy Connection, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Do We Think Connection Will Underperform?

We're sitting this one out for now. Here are three reasons you should be careful with CNXN and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Connection’s sales grew at a sluggish 1.9% compounded annual growth rate over the last five years. This was below our standards.

Connection Quarterly Revenue

2. EPS Barely Growing

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Connection’s EPS grew at an unimpressive 4.9% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 1.9% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

Connection Trailing 12-Month EPS (Non-GAAP)

3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Connection has shown poor cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 2.3%, lousy for a business services business.

Connection Trailing 12-Month Free Cash Flow Margin

Final Judgment

We cheer for all companies making their customers lives easier, but in the case of Connection, we’ll be cheering from the sidelines. With its shares lagging the market recently, the stock trades at 17.3× forward P/E (or $62.75 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. We’d recommend looking at one of our top digital advertising picks.

Stocks We Like More Than Connection

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

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