Insight Enterprises has gotten torched over the last six months - since March 2025, its stock price has dropped 25.5% to $119.48 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Is there a buying opportunity in Insight Enterprises, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Insight Enterprises Will Underperform?
Even with the cheaper entry price, we're cautious about Insight Enterprises. Here are three reasons there are better opportunities than NSIT and a stock we'd rather own.
1. Long-Term Revenue Growth Flatter Than a Pancake
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Insight Enterprises struggled to consistently increase demand as its $8.36 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of poor business quality.
2. Recent EPS Growth Below Our Standards
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Insight Enterprises’s EPS grew at a weak 2.8% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 7.2% annualized revenue declines and tells us management adapted its cost structure in response to a challenging demand environment.
3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Insight Enterprises 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.
Final Judgment
We see the value of companies helping their customers, but in the case of Insight Enterprises, we’re out. After the recent drawdown, the stock trades at 11.8× forward P/E (or $119.48 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are better stocks to buy right now. We’d recommend looking at one of our top digital advertising picks.
Stocks We Would Buy Instead of Insight Enterprises
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