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PC Connection
(NASDAQ:CNXN)
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Rating:75Outperform
Price Target:
$93.00
▲(15.40% Upside)
Action:Reiterated
Date:07/31/26
CNXN scores well due to strong financial stability (very low leverage) and a positive earnings narrative with record performance and supportive guidance/backlog. The uptrend in the stock price reinforces momentum. Offsetting these positives are weaker recent cash flow/cash conversion and a valuation that looks only average (P/E ~24 with a modest dividend yield).
Positive Factors
Broad-based growth and margin expansion
Growth across business and enterprise solutions, software, networking, and endpoints, together with stronger operating leverage, indicates improving execution. Higher earnings growth and margin expansion can strengthen profitability if demand and solution mix remain supportive.
Negative Factors
Weakening cash conversion
Positive earnings are not consistently converting into cash, increasing dependence on working-capital release or liquidity during expansion. Persistent volatility in operating and free cash flow could constrain reinvestment and reduce the flexibility of capital returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad-based growth and margin expansion
Growth across business and enterprise solutions, software, networking, and endpoints, together with stronger operating leverage, indicates improving execution. Higher earnings growth and margin expansion can strengthen profitability if demand and solution mix remain supportive.
Read all positive factors
PC Connection (CNXN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13B
Dividend Yield0.9%
Average Volume (3M)147.24K
Price to Earnings (P/E)22.1
Beta (1Y)0.87
Revenue Growth3.23%
EPS Growth14.66%
CountryUS
Employees2,525
SectorTechnology
Sector Strength88
IndustryTechnology Distributors
Share Statistics
EPS (TTM)3.79
Shares Outstanding25,238,098
10 Day Avg. Volume111,574
30 Day Avg. Volume147,235
Financial Highlights & Ratios
PEG Ratio-19.43
Price to Book (P/B)1.62
Price to Sales (P/S)0.51
P/FCF Ratio25.38
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 TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)3.93
Revenue Forecast (FY)$3.00B
PC Connection Business Overview & Revenue Model
Company Description
PC Connection, Inc., together with its affiliates, offers a comprehensive range of information technology (IT) solutions. The company structures its operations into three main divisions: Business Solutions, Enterprise Solutions, and Public Sector ...
How the Company Makes Money
PC Connection primarily makes money by selling third-party IT products and solutions sourced from major technology vendors to customers across several end markets (notably enterprise/business, public sector/government & education, and consumers). ...
PC Connection Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call highlighted multiple record financial outcomes — revenue, gross billings, gross profit, operating income, net income, and EPS — driven by broad-based demand (notebooks/endpoints, software, networking) and strong vertical performance. Management emphasized elevated backlog and strong liquidity, while acknowledging near-term timing variability (pull-ins, supply dynamics), elevated working capital (inventory and receivables), and an expected slight sequential revenue decline in Q3. Overall, the positive operational and financial momentum and record metrics materially outweigh the manageable working-capital and timing headwinds.Positive Updates
Record Net Sales, Gross Billings, and Gross Profit
Net sales $854.0M, up 12.4% year-over-year; gross billings $1.2B, up 14%; gross profit $157.5M, up 14.3%; gross margin expanded 30 basis points to 18.4%.
Negative Updates
Working Capital Use and Cash from Operations
Cash used from operations in H1 2026 was $49.5M driven by working capital investments: inventory increased $61.5M and accounts receivable increased $80.6M (partially offset by accounts payable +$39.3M).
Read all updates
Q2-2026 Updates
Positive
Negative
Record Net Sales, Gross Billings, and Gross Profit
Net sales $854.0M, up 12.4% year-over-year; gross billings $1.2B, up 14%; gross profit $157.5M, up 14.3%; gross margin expanded 30 basis points to 18.4%.
Read all positive updates
Company Guidance
Management guided that Q3 will likely be slightly down sequentially from Q2 but still up year‑over‑year in the high single digits, with demand “solid through Q3” and the company expecting to outperform the U.S. IT market by ~200 basis points this year; they highlighted elevated backlog (Enterprise at a record level; Business Solutions backlog highest in three years) and said some pull‑ins were mid‑single‑digit contributors. They expect inventory to come down toward roughly a $150M range by year‑end, cited a strong liquidity position of $340.7M in cash/cash equivalents/short‑term investments, noted $81.2M remaining on the share‑repurchase authorization, declared a $0.27/share dividend payable Aug 28 (record Aug 11) after a $0.20 quarterly dividend, and pointed to trailing‑12‑month adjusted EBITDA of $144.5M (up 18% YOY) as supporting continued profitable growth.PC Connection Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
90
Very Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.99B | 2.87B | 2.80B | 2.85B | 3.12B | 2.89B |
| Gross Profit | 564.46M | 539.33M | 519.79M | 511.74M | 526.18M | 464.58M |
| EBITDA | 143.42M | 128.33M | 110.46M | 118.22M | 132.58M | 108.68M |
| Net Income | 95.84M | 83.72M | 87.09M | 83.27M | 89.22M | 69.91M |
Balance Sheet | ||||||
| Total Assets | 1.43B | 1.35B | 1.30B | 1.19B | 1.10B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 340.69M | 406.68M | 442.61M | 297.19M | 122.93M | 108.31M |
| Total Debt | 7.55M | 996.00K | 3.36M | 4.91M | 8.16M | 10.21M |
| Total Liabilities | 474.98M | 440.80M | 388.36M | 347.61M | 333.65M | 400.91M |
| Stockholders Equity | 952.65M | 910.13M | 910.99M | 840.77M | 766.17M | 682.47M |
Cash Flow | ||||||
| Free Cash Flow | 34.05M | 58.05M | 166.29M | 188.36M | 25.81M | 47.45M |
| Operating Cash Flow | 42.02M | 65.44M | 173.87M | 197.95M | 34.89M | 57.75M |
| Investing Cash Flow | -66.59M | 42.83M | -115.29M | -160.20M | -9.08M | -8.73M |
| Financing Cash Flow | -38.46M | -93.37M | -25.22M | -15.73M | -11.19M | -36.37M |
PC Connection Technical Analysis
Positive
80.59
Price Trends
79.40
Positive
73.19
Positive
66.23
Positive
Market Momentum
0.65
Negative
65.57
Neutral
93.43
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 80.59 is above the 20-day moving average (MA) of 80.05, above the 50-day MA of 79.40, and above the 200-day MA of 66.23, indicating a bullish trend. The MACD of 0.65 indicates Negative momentum. The RSI at 65.57 is Neutral, neither overbought nor oversold. The STOCH value of 93.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNXN.
PC Connection Risk Analysis
PC Connection disclosed 28 risk factors in its most recent earnings report. PC Connection reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PC Connection Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $544.33M | 24.75 | 17.50% | 0.61% | 23.05% | -7.49% | |
75 Outperform | $2.13B | 22.07 | 10.40% | 0.90% | 3.23% | 14.66% | |
71 Outperform | $1.18B | 15.63 | 8.66% | ― | 6.09% | 21.23% | |
69 Neutral | $10.99B | 13.77 | 12.14% | ― | 26.05% | 76.95% | |
69 Neutral | $4.72B | 22.97 | 13.08% | ― | 2.68% | 46.40% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $7.56B | 22.71 | 6.77% | 1.54% | 24.47% | 47.08% |
* Technology Sector Average
CNXN
PC Connection
83.64
21.06
33.66%
ARW
Arrow Electronics
217.41
91.19
72.25%
AVT
Avnet
92.42
40.51
78.02%
NSIT
Insight Enterprises
157.34
30.60
24.14%
SCSC
ScanSource
57.69
14.47
33.48%
CLMB
Climb Global Solutions
27.84
-3.42
-10.93%
PC Connection Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
PC Connection Posts Record Q2 Results, Raises Dividend
Positive
Jul 29, 2026
On July 29, 2026, Connection reported record financial results for the second quarter ended June 30, 2026, highlighted by net sales of $854.0 million, up 12.4% year on year, and net income of $33.2 million, up 33.8%. The company’s gross marg...
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.