CDW (CDW) AI Stock Analysis

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.