CDW Corporation (CDW)
NASDAQ:CDW
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CDW
(NASDAQ:CDW)
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Rating:65Neutral
Price Target:
$152.00
▲(13.47% Upside)
Action:Reiterated
Date:05/30/26
The score is driven primarily by solid but not exceptional financial performance: dependable margins and cash conversion, but constrained by elevated leverage and slowing recent free-cash-flow momentum. Valuation is supportive (mid-teens P/E and ~2% yield), while technicals are mixed (rebound above shorter-term averages but still below the 200-day with negative MACD). Earnings call commentary adds moderate support via steady guidance and an identified productivity runway, tempered by near-term margin and fulfillment timing risks.
Positive Factors
Diversified business model
CDW's multi-channel reseller plus services model spans hardware, software, subscriptions and managed/professional services across multiple end markets and geographies. This diversification supports recurring revenue, cross-sell opportunities and resilience versus single-market cyclicality, sustaining revenue stability over months.
Negative Factors
Elevated leverage
Material leverage increases sensitivity to earnings volatility and refinancing cycles and reduces financial flexibility. Even with a net-debt target and recent improvement, elevated debt levels constrain capital options and heighten risk if cash flow momentum weakens over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified business model
CDW's multi-channel reseller plus services model spans hardware, software, subscriptions and managed/professional services across multiple end markets and geographies. This diversification supports recurring revenue, cross-sell opportunities and resilience versus single-market cyclicality, sustaining revenue stability over months.
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.
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The Fly
The FlyCDW (CDW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.89B
Dividend Yield1.81%
Average Volume (3M)2.40M
Price to Earnings (P/E)15.8
Beta (1Y)1.06
Revenue Growth7.41%
EPS Growth1.33%
CountryUS
Employees15,100
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)8.25
Shares Outstanding127,753,450
10 Day Avg. Volume2,348,584
30 Day Avg. Volume2,395,333
Financial Highlights & Ratios
PEG Ratio19.31
Price to Book (P/B)6.86
Price to Sales (P/S)0.80
P/FCF Ratio16.44
Enterprise Value/Market Cap1.28
Enterprise Value/Revenue0.94
Enterprise Value/Gross Profit4.37
Enterprise Value/Ebitda11.65
Forecast
1Y Price Target
$138.83Price Target Upside3.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.71
Revenue Forecast (FY)$23.51B
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 organizations, earning revenue largely from the margin between its purchase cost from vendors and the price charged to customers. Key revenue streams include: (1)...
CDW Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial start to 2026 with double-digit growth in key hardware and software categories, record Q1 gross profit, expanding EPS, strong free cash flow and accelerated AI-driven initiatives (including a $100M–$200M run-rate productivity opportunity). Offsetting this optimism were margin compression driven by mix and timing, higher SG&A in Q1, flat services revenue, supply-related shipment delays and elevated inventory/backlog that create execution and timing risk into Q2 and the back half. Management maintained a prudent outlook for the year (low-to-mid single-digit gross profit growth, EPS growing at the high end of mid-single digits) and emphasized discipline, liquidity and strategic investments in AI and process modernization.Positive Updates
Top-line Revenue Growth
Consolidated net sales increased 9% year-over-year in Q1 2026, driven by strength across Commercial (+~10%), Government (+5%) and International (U.K. & Canada combined +18% in USD).
Negative Updates
Gross Margin Compression
Gross margin declined 60 basis points YoY to 21%, primarily driven by mix (lower netted down revenues and higher hardware mix) and timing; management expects margins to be approximately in line with 2025 for the full year but Q1 showed pressure.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-line Revenue Growth
Consolidated net sales increased 9% year-over-year in Q1 2026, driven by strength across Commercial (+~10%), Government (+5%) and International (U.K. & Canada combined +18% in USD).
Read all positive updates
Company Guidance
CDW maintained a prudent 2026 outlook, forecasting the U.S. IT addressable market to grow in the low single digits with CDW targeting 200–300 basis points of outperformance; it now expects full‑year gross profit growth of low‑to‑mid single digits, gross margin approximately in line with 2025, and full‑year non‑GAAP diluted EPS growth at the high end of mid‑single digits (constant currency, with a slight FX tailwind). For Q2 the company expects sequential gross profit growth in the high single digits (mid‑single digits year‑over‑year), Q2 non‑GAAP EPS up high single digits, and modestly higher SG&A than Q1 with OpEx as a percent of gross profit seasonally lower and similar to last year’s Q2; management also said H2 gross profit contribution should be slightly above H1 (noting more weight in H1 than historically). Longer‑range operational savings from the “Geared for Growth” AI modernization are expected to begin accruing in H2 and target $100–$200 million of run‑rate improvement in 2027–2028; capital targets reiterated include net debt of $5.1B (2.5x net leverage within a 2–3x target), liquidity of $2.5B, adjusted free cash flow of $251M in Q1 (~85% conversion of non‑GAAP net income), $282M returned to shareholders in Q1 (112% of FCF vs. a 2026 target of 50–75%), and a targeted dividend payout of roughly 25% of non‑GAAP net income.CDW Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
54
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.90B | 22.42B | 21.00B | 21.38B | 23.75B | 20.82B |
| Gross Profit | 4.94B | 4.87B | 4.60B | 4.65B | 4.69B | 3.57B |
| EBITDA | 1.85B | 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 | 16.45B | 16.03B | 14.68B | 13.28B | 13.13B | 13.20B |
| Cash, Cash Equivalents and Short-Term Investments | 578.60M | 618.70M | 717.70M | 588.70M | 315.20M | 258.10M |
| Total Debt | 6.15B | 6.33B | 5.99B | 5.81B | 6.10B | 7.35B |
| Total Liabilities | 13.90B | 13.42B | 12.33B | 11.24B | 11.53B | 12.49B |
| Stockholders Equity | 2.56B | 2.61B | 2.35B | 2.04B | 1.60B | 705.70M |
Cash Flow | ||||||
| Free Cash Flow | 1.08B | 1.09B | 1.15B | 1.45B | 1.21B | 684.60M |
| Operating Cash Flow | 1.19B | 1.21B | 1.28B | 1.60B | 1.34B | 784.60M |
| Investing Cash Flow | 71.20M | 70.20M | -659.20M | -229.60M | -164.50M | -2.77B |
| Financing Cash Flow | -1.16B | -1.18B | -686.90M | -1.10B | -1.10B | 832.80M |
CDW Technical Analysis
Positive
133.96
Price Trends
123.94
Positive
123.88
Positive
135.76
Negative
Market Momentum
4.18
Negative
58.16
Neutral
34.66
Neutral
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 133.96 is above the 20-day moving average (MA) of 122.25, above the 50-day MA of 123.94, and below the 200-day MA of 135.76, indicating a neutral trend. The MACD of 4.18 indicates Negative momentum. The RSI at 58.16 is Neutral, neither overbought nor oversold. The STOCH value of 34.66 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $24.72B | 11.16 | 14.79% | 1.46% | 6.55% | -3.10% | |
70 Outperform | $9.92B | 13.96 | 119.81% | ― | 2.30% | -37.31% | |
68 Neutral | $15.37B | 10.83 | 29.15% | 0.87% | 2.34% | 10.44% | |
67 Neutral | $4.98B | 13.27 | 10.67% | ― | 14.21% | -2.92% | |
66 Neutral | $19.87B | 14.30 | 15.03% | 2.78% | -0.55% | -3.97% | |
65 Neutral | $16.89B | 15.83 | 42.37% | 1.81% | 7.41% | 1.33% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CDW
CDW
132.19
-36.89
-21.82%
CTSH
Cognizant
52.17
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-33.53%
EPAM
Epam Systems
95.38
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-44.73%
IT
Gartner
148.17
-260.95
-63.78%
WIT
Wipro
2.20
-0.71
-24.37%
LDOS
Leidos Holdings
122.16
-25.07
-17.03%
CDW Corporate Events
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...
Business Operations and StrategyFinancial Disclosures
CDW Reorganizes Sales Structure and Reporting Segments
Neutral
May 1, 2026
Effective January 1, 2026, CDW realigned its customer-facing sales organization and reshaped its reportable segments into Commercial, Government and Education, while maintaining CDW U.K. and CDW Canada in an unchanged “Other” category....
Executive/Board Changes
CDW Announces Planned Board Transition as Mehrotra Departs
Neutral
Mar 27, 2026
On March 24, 2026, CDW Corporation announced that board member Sanjay Mehrotra informed the company he will not stand for reelection at the 2026 Annual Meeting of Stockholders and will serve through the remainder of his current term. The company s...
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.