PC Connection (CNXN) AI Stock Analysis

• Market Cap: $1.73B
• Dividend Yield: 0.68%
• Average Volume (3M): 147.18K
• Price to Earnings (P/E): 20.7
• Beta (1Y): 0.88
• Revenue Growth: -1.70%
• EPS Growth: 4.45%
• Country: US
• Employees: 2,580
• Sector: Technology
• Sector Strength: 68
• Industry: Technology Distributors
• EPS (TTM): 3.29
• Shares Outstanding: 25,397,238
• 10 Day Avg. Volume: 99,457
• 30 Day Avg. Volume: 147,180
• PEG Ratio: 4.66
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.68
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

PC Connection's stock is supported by strong financial fundamentals and a stable balance sheet, though technical indicators suggest caution due to potential overbought conditions. The valuation is fair, indicating no significant risk of overvaluation. While the earnings call highlighted both challenges and strengths, the company's strategic initiatives and sector growth provide optimism for future performance. The absence of impactful corporate events means the overall score reflects internal performance and market conditions.

PC Connection Business Overview & Revenue Model

Company Description

PC Connection, Inc., together with its subsidiaries, provides various information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories, as well as provides services related to design, configuration, and implementation of IT solutions. The company markets its products and services through its websites comprising connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) that include small office/home office customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales, and marketing programs targeted to specific customer populations, as well as through digital, web, and print media advertising. The company was founded in 1982 and is headquartered in Merrimack, New Hampshire.

How the Company Makes Money

PC Connection generates revenue through the sale of a wide array of IT products and services. The company's primary revenue streams include the sale of computer systems, software, and peripheral equipment. Additionally, PC Connection earns from offering professional services such as consulting, design, installation, and support services. Significant partnerships with leading technology manufacturers, such as Apple, Microsoft, and Cisco, contribute to its earnings by enabling access to the latest technology solutions. The company's revenue model is enhanced by its ability to provide customized IT solutions, effectively addressing the unique requirements of its diverse customer base across multiple industries.

PC Connection Financial Statement Overview

Summary

PC Connection is performing well overall with solid financial health across the board. The income statement highlights strong profitability and operational efficiency. The balance sheet reveals a low leverage and a strong equity position, while the cash flow statement shows a good cash generation capability despite some recent declines. The company's financial position is stable, although attention should be given to maintaining growth momentum and addressing the recent slowing of cash flow generation.

Income Statement

PC Connection's income statement reveals consistent revenue growth, with a TTM revenue increase to $2.87 billion from $2.80 billion in the previous year. The gross profit margin remains robust at around 18.3%, reflecting efficient cost management. Net profit margin has slightly improved, reaching 3.04% for the TTM. EBIT and EBITDA margins are stable, indicating strong operational efficiency. However, the revenue growth rate has slowed compared to previous years, suggesting potential market saturation or increased competition.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio of 0.0012, indicating minimal reliance on debt financing. The equity ratio stands at a healthy 70.3%, reflecting a solid financial foundation. Return on Equity (ROE) is stable at 9.97%, showcasing efficient use of shareholder funds. The company has increased cash reserves, providing a cushion for future investments or downturns. However, the slight decline in equity between the latest TTM and the previous annual period suggests some challenges in retaining earnings.

Cash Flow

PC Connection demonstrates a strong cash flow position with a positive free cash flow of $56.5 million in the TTM. The operating cash flow to net income ratio is favorable at 0.73, indicating effective cash generation from operations. However, the free cash flow growth rate has slowed compared to previous periods, and there is a notable decline in operating cash flow from $173.9 million in the previous annual period to $64.2 million in the TTM. This could signal potential pressures on future liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.80B	2.85B	3.12B	2.89B	2.59B
	Gross Profit
519.79M	511.74M	526.18M	464.58M	418.81M
	EBIT
97.06M	105.84M	120.55M	96.52M	72.07M
	EBITDA
110.49M	118.22M	132.53M	108.72M	86.67M
	Net Income Common Stockholders
87.09M	83.27M	89.22M	69.91M	55.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
442.61M	297.19M	122.93M	108.31M	95.66M
	Total Assets
1.30B	1.19B	1.10B	1.08B	1.02B
	Total Debt
3.36M	4.91M	8.16M	6.79M	9.63M
	Net Debt
-174.96M	-140.04M	-114.77M	-101.52M	-86.02M
	Total Liabilities
388.36M	347.61M	333.65M	401.69M	379.05M
	Stockholders Equity
910.99M	840.77M	766.17M	682.47M	636.33M
Cash Flow		Free Cash Flow
166.29M	188.36M	25.81M	47.45M	25.07M
	Operating Cash Flow
173.87M	197.95M	34.89M	57.75M	36.10M
	Investing Cash Flow
-115.29M	-160.20M	-9.08M	-8.73M	-11.03M
	Financing Cash Flow
-25.22M	-15.73M	-11.19M	-36.37M	-19.47M

PC Connection Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNXN, the sentiment is Positive. The current price of 68.08 is above the 20-day moving average (MA) of 61.26, above the 50-day MA of 62.15, and below the 200-day MA of 68.54, indicating a neutral trend. The MACD of 0.74 indicates Negative momentum. The RSI at 72.50 is Negative, neither overbought nor oversold. The STOCH value of 90.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNXN.

PC Connection Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXN	73 Outperform	$1.73B	20.72	10.11%	0.68%	-1.70%	4.45%
ARW	71 Outperform	$5.97B	15.83	6.68%	―	-15.66%	-54.03%
NSIT	71 Outperform	$4.26B	26.70	11.37%	―	-8.73%	-35.37%
SCSC	71 Outperform	$809.02M	13.58	6.79%	―	-15.92%	-25.15%
AVT	70 Outperform	$4.30B	14.09	6.42%	2.61%	-10.52%	-42.40%
Sector *	60 Neutral	$10.94B	10.58	-7.08%	2.98%	7.52%	-12.04%
VSH	49 Neutral	$1.86B	26.74	-1.47%	2.92%	-13.65%	-110.03%

PC Connection Corporate Events

PC Connection Reports Strong Q1 2025 Financial Results

On April 30, 2025, Connection reported its first quarter 2025 financial results, highlighting a 10.9% increase in net sales to $701 million and a 2.5% rise in net income to $13.5 million. The company announced a quarterly dividend of $0.15 per share and a $50 million increase in its share repurchase program, bringing the total authorization to $170 million. The results reflect strong demand for digital workplace solutions and datacenter modernization, contributing to a 20% growth in adjusted earnings per share. The Public Sector Solutions segment saw significant growth, with a 54.7% increase in net sales, driven by a 228% rise in federal government sales.

Spark’s Take on CNXN Stock

According to Spark, TipRanks’ AI Analyst, CNXN is a Neutral.

PC Connection’s stock is supported by strong financial fundamentals and a stable balance sheet, though technical indicators suggest bearish momentum. Valuation appears fair with a reasonable P/E ratio, and while the earnings call highlights challenges, it also provides optimism for future growth. The absence of impactful corporate events means the overall score reflects internal performance and market conditions.

To see Spark’s full report on CNXN stock, click here.

PC Connection Reports Mixed 2024 Financial Results

On February 5, 2025, Connection announced its financial results for the fourth quarter and full year of 2024, showing mixed performance. Despite a 1.8% increase in net sales in the fourth quarter, net income decreased by 12.9% compared to the previous year. The full year results revealed a net income increase of 4.6%, driven by record gross margins from sales of advanced technologies such as cloud, software, and security solutions. The company declared a quarterly dividend of $0.15 per share, highlighting its confidence in long-term growth, despite challenges faced in certain segments.