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CDW
(NASDAQ:CDW)
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Rating:70Outperform
Price Target:
$169.00
▲(26.29% Upside)
Action:Reiterated
Date:08/05/26
The score is supported by strong technical momentum and a constructive earnings update with raised guidance and improving operating discipline. Offsetting this are weaker financial risk characteristics—particularly elevated leverage and softer recent free cash flow—and only moderately attractive valuation.
Positive Factors
Recurring & partner-driven revenue
Growth in netted-down and recurring streams (now ~36% of gross profit) increases predictable revenue, strengthens vendor-aligned incentives and margin stability, and reduces reliance on cyclical hardware resale. This durable shift improves long-term cash visibility and service attach economics.
Negative Factors
Elevated leverage
Material leverage increases sensitivity to cash-flow variability and interest-rate moves, constraining strategic flexibility for M&A or aggressive buybacks. While equity and ROE have improved, returns are partly leverage-amplified, increasing downside risk if revenue or cash conversion weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring & partner-driven revenue
Growth in netted-down and recurring streams (now ~36% of gross profit) increases predictable revenue, strengthens vendor-aligned incentives and margin stability, and reduces reliance on cyclical hardware resale. This durable shift improves long-term cash visibility and service attach economics.
Read all positive factors
CDW Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows where the company earns its revenue across different regions, with a heavy North American focus pointing to sensitivity to U.S. IT spending and any regional downturns. Tracking shifts over time flags successful international growth or rising exposure to new markets.
Shows where the company earns its revenue across different regions, with a heavy North American focus pointing to sensitivity to U.S. IT spending and any regional downturns. Tracking shifts over time flags successful international growth or rising exposure to new markets.
Data provided by:
The Fly
The FlyCDW (CDW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.88B
Dividend Yield1.7%
Average Volume (3M)1.96M
Price to Earnings (P/E)17.9
Beta (1Y)1.09
Revenue Growth7.41%
EPS Growth1.33%
CountryUS
Employees14,800
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)8.35
Shares Outstanding127,753,450
10 Day Avg. Volume1,988,521
30 Day Avg. Volume1,964,229
Financial Highlights & Ratios
PEG Ratio19.29
Price to Book (P/B)6.86
Price to Sales (P/S)0.80
P/FCF Ratio16.44
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$155.50Price Target Upside16.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.76
Revenue Forecast (FY)$23.57B
CDW Business Overview & Revenue Model
Company Description
CDW Corporation specializes in delivering comprehensive information technology services and products across North America and the United Kingdom. It strategically targets three core client divisions: corporate enterprises, small to medium-sized bu...
How the Company Makes Money
CDW primarily makes money by selling third-party IT products and related services to customers, generating revenue mainly from product resale (with gross profit earned through distribution/reseller margins and vendor program incentives) and from s...
CDW Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call presents a largely positive operational and financial story: company delivered record quarterly revenue, gross profit and EPS driven by strong infrastructure, software, cloud and security demand, and raised its full-year outlook. Key strengths include diversified end markets, international momentum, improving expense discipline and pronounced AI-related opportunity across the full stack. Primary near-term risks are margin compression from product mix, muted services growth due to deployment timing, a temporary working capital build that depressed free cash flow conversion, and a modestly cautious near-term margin outlook. Management expects services tailwinds and cash conversion to normalize in the back half of the year.Positive Updates
Record Quarterly Financials
Net sales of $6.6B, up 10% YoY; gross profit of $1.3B, up 6.3% YoY; non-GAAP operating income of $556M, up 7% YoY; non-GAAP EPS of $2.91, up 11.9% YoY. Net sales, gross profit and non-GAAP EPS set all-time quarterly records.
Negative Updates
Gross Margin Compression
GAAP gross margin 20.1%, down 70 bps YoY. Management attributes margin decline to mix shift toward large hardware infrastructure deals and lower relative contribution from services.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Financials
Net sales of $6.6B, up 10% YoY; gross profit of $1.3B, up 6.3% YoY; non-GAAP operating income of $556M, up 7% YoY; non-GAAP EPS of $2.91, up 11.9% YoY. Net sales, gross profit and non-GAAP EPS set all-time quarterly records.
Read all positive updates
Company Guidance
CDW raised its full‑year outlook, forecasting full‑year gross profit growth in the mid‑single‑digits and full‑year non‑GAAP net income per diluted share growth at the high end of the high‑single‑digit range, with full‑year gross margin expected to be modestly below 2025 and second‑half gross margins below second‑half 2025 as seasonality shifts toward a more typical second‑half weighting; management expects the U.S. IT addressable market to grow mid‑single‑digits in 2026 with CDW outperformance of 200–300 basis points, sees currency as a slight benefit to reported growth, and provided Q3 modeling of gross profit up mid‑single‑digits year‑over‑year, non‑GAAP SG&A lower than Q2 (driving operating expense as a percent of gross profit down both year‑over‑year and sequentially) and Q3 non‑GAAP EPS growth at the high end of the high‑single‑digit range. Balance‑sheet and cash expectations include net debt of $5.5 billion, liquidity of $2.0 billion, a 3‑month average cash conversion cycle of 21 days (target: high‑teens to low‑20s), adjusted free cash flow year‑to‑date of $278 million (42% of non‑GAAP net income) with an expectation to normalize toward an 80–90% conversion rate in the back half, a targeted ~25% dividend payout ratio, net leverage of 2.5x (target 2.0–3.0x), and more than $1.1 billion of remaining share‑repurchase capacity.CDW Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
52
Neutral
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.50B | 22.42B | 21.00B | 21.38B | 23.75B | 20.82B |
| Gross Profit | 5.02B | 4.87B | 4.60B | 4.65B | 4.69B | 3.57B |
| EBITDA | 1.83B | 1.95B | 1.93B | 1.95B | 2.01B | 1.64B |
| Net Income | 1.08B | 1.07B | 1.08B | 1.10B | 1.11B | 988.60M |
Balance Sheet | ||||||
| Total Assets | 17.25B | 16.03B | 14.68B | 13.28B | 13.13B | 13.20B |
| Cash, Cash Equivalents and Short-Term Investments | 361.80M | 618.70M | 717.70M | 588.70M | 315.20M | 258.10M |
| Total Debt | 5.96B | 6.33B | 5.99B | 5.81B | 6.10B | 7.35B |
| Total Liabilities | 14.81B | 13.42B | 12.33B | 11.24B | 11.53B | 12.49B |
| Stockholders Equity | 2.44B | 2.61B | 2.35B | 2.04B | 1.60B | 705.70M |
Cash Flow | ||||||
| Free Cash Flow | 1.11B | 1.09B | 1.15B | 1.45B | 1.21B | 684.60M |
| Operating Cash Flow | 1.26B | 1.21B | 1.28B | 1.60B | 1.34B | 784.60M |
| Investing Cash Flow | -174.10M | 70.20M | -659.20M | -229.60M | -164.50M | -2.77B |
| Financing Cash Flow | -1.21B | -1.18B | -686.90M | -1.10B | -1.10B | 832.80M |
CDW Technical Analysis
Positive
133.82
Price Trends
133.90
Positive
127.43
Positive
131.85
Positive
Market Momentum
4.38
Negative
69.27
Neutral
89.66
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDW, the sentiment is Positive. The current price of 133.82 is below the 20-day moving average (MA) of 139.16, below the 50-day MA of 133.90, and above the 200-day MA of 131.85, indicating a bullish trend. The MACD of 4.38 indicates Negative momentum. The RSI at 69.27 is Neutral, neither overbought nor oversold. The STOCH value of 89.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CDW.
CDW Risk Analysis
CDW disclosed 23 risk factors in its most recent earnings report. CDW reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CDW Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $14.54B | 10.48 | 29.15% | 1.51% | 2.34% | 10.44% | |
76 Outperform | $24.93B | 11.88 | 14.94% | 2.82% | 5.64% | -5.39% | |
70 Outperform | $18.88B | 17.92 | 42.37% | 1.88% | 7.41% | 1.33% | |
69 Neutral | $5.51B | 15.08 | 10.67% | ― | 14.21% | -2.92% | |
68 Neutral | $10.11B | 14.89 | 401.44% | ― | 2.30% | -37.31% | |
65 Neutral | $19.08B | 14.54 | 15.58% | 1.11% | -0.12% | -7.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CDW
CDW
140.10
-22.27
-13.72%
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55.78
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EPAM
Epam Systems
109.87
-41.44
-27.39%
IT
Gartner
186.41
-57.30
-23.51%
WIT
Wipro
2.00
-0.56
-21.72%
LDOS
Leidos Holdings
126.85
-45.83
-26.54%
CDW Corporate Events
Business Operations and StrategyExecutive/Board Changes
CDW Announces Planned CFO Retirement and Leadership Transition
Positive
Aug 5, 2026
On August 5, 2026, CDW announced that Chief Financial Officer Albert J. Miralles plans to retire in 2027 after an orderly transition, following notification to the company on August 3, 2026. Miralles will remain CFO until a successor is named, the...
Business Operations and StrategyDividendsFinancial Disclosures
CDW Posts Strong Q2 2026 Results, Raises Dividend
Positive
Aug 5, 2026
CDW reported its second-quarter 2026 results on August 5, 2026, posting net sales of $6.57 billion, up 10 percent year over year, driven by strong demand for data storage, servers, mobile devices, software, and networking products across commercia...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
CDW Shareholders Approve Governance Changes and Director Slate
Positive
May 26, 2026
At its May 21, 2026 annual meeting, CDW stockholders approved an amendment to the company’s certificate of incorporation to allow stockholder action by written consent, and the board subsequently adopted amended and restated bylaws to align ...
Business Operations and StrategyStock Buyback
CDW Expands Share Repurchase Authorization to Boost Buybacks
Positive
May 13, 2026
On May 13, 2026, CDW Corporation announced that its board had authorized a $1 billion increase to the company’s share repurchase program, reinforcing share buybacks as a core element of its capital allocation strategy alongside dividends, st...
Business Operations and StrategyDividendsFinancial Disclosures
CDW Reports Strong Q1 2026 Results, Raises Dividend
Positive
May 6, 2026
On May 6, 2026, CDW reported first quarter 2026 results showing net sales of $5.68 billion, up 9.2 percent year over year, driven by stronger demand for data storage and servers, networking products, software, and notebooks and mobile devices. All...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.