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ScanSource
(NASDAQ:SCSC)
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Rating:61Neutral
Price Target:
$59.00
▲(7.51% Upside)
Action:Reiterated
Date:08/21/26
Overall score is held back primarily by mixed financial performance signals (notably the TTM disruption risk in revenue/earnings and a TTM drop in operating/free cash flow) and weak valuation quality due to a deeply negative P/E with no dividend yield provided. Offsetting these, the earnings call was meaningfully positive with clear FY2027 growth/EBITDA/FCF guidance and a strong balance-sheet narrative, while technicals show an established uptrend despite near-term momentum cooling.
Positive Factors
Recurring revenue growth and improving mix
Growth in recurring revenue and its meaningful gross-profit contribution can improve revenue visibility, partner retention and earnings quality. This mix shift gives ScanSource a more durable foundation than reliance on one-time hardware transactions alone.
Negative Factors
Weak recent revenue and earnings quality signals
Although FY26 results improved, the reported TTM disruption creates uncertainty about the underlying earnings trajectory and makes recent performance harder to interpret. If the decline reflects a real operating issue rather than data noise, it could pressure scale and profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue growth and improving mix
Growth in recurring revenue and its meaningful gross-profit contribution can improve revenue visibility, partner retention and earnings quality. This mix shift gives ScanSource a more durable foundation than reliance on one-time hardware transactions alone.
Read all positive factors
ScanSource (SCSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.05B
Dividend YieldN/A
Average Volume (3M)242.05K
Price to Earnings (P/E)―
Beta (1Y)1.31
Revenue Growth3.76%
EPS Growth18.30%
CountryUS
Employees2,100
SectorTechnology
Sector Strength88
IndustryTechnology Distributors
Share Statistics
EPS (TTM)3.69
Shares Outstanding20,324,530
10 Day Avg. Volume311,631
30 Day Avg. Volume242,050
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
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
$43.00Price Target Upside-21.65% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)4.41
Revenue Forecast (FY)$3.21B
ScanSource Business Overview & Revenue Model
Company Description
ScanSource, Inc. is an international technology distributor, providing a wide array of products and solutions across the United States, Canada, and other global regions. The company's business activities are structured into two distinct segments: ...
How the Company Makes Money
ScanSource primarily makes money by buying technology products and services from vendors and selling them to channel partners at a markup, with revenue generally recognized on the gross amount for product resale (subject to accounting principal-ve...
ScanSource Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a positive tone: the company reported strong Q4 and full-year growth, record non-GAAP EPS, solid free cash flow and a clean balance sheet, and provided a constructive FY2027 organic outlook. Management announced a strategic, potentially transformative acquisition (MicroAge) to expand services and TAM. Key near-term risks include regional softness in Brazil, supplier (Juniper) fulfillment constraints that may delay benefits into H2, tougher year‑over‑year comps, and integration/channel management risks associated with the acquisition. On balance, the strong financial performance, cash generation, record EPS, and strategic M&A outweigh the noted operational and timing challenges.Positive Updates
Strong Quarterly and Annual Revenue Growth
Q4 net sales increased 17% year over year and full year net sales increased 6% year over year, reflecting broad-based demand and return to growth across key technologies.
Negative Updates
Brazil Top-Line Weakness
Brazil experienced another tough quarter with disappointing top-line performance, prompting structural changes and headcount reductions despite continued profitability at the local level.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Quarterly and Annual Revenue Growth
Q4 net sales increased 17% year over year and full year net sales increased 6% year over year, reflecting broad-based demand and return to growth across key technologies.
Read all positive updates
Company Guidance
ScanSource guided FY2027 (organic, excluding the planned MicroAge acquisition) to revenue growth of 6%–10%, adjusted EBITDA of $158M–$165M (implying an adjusted EBITDA margin of about 4.60%–4.65%), at least $85M of free cash flow, and an effective tax rate of 27.5%–28.5%; management reiterated a target net leverage range of 1x–2x adjusted EBITDA (they ended FY26 with net debt leverage ≈0 and $88M cash) and said they will update guidance to include MicroAge on the Q1 call. For context, FY26 results cited on the call included Q4 net sales +17% YoY and full‑year net sales +6% YoY, consolidated gross profit +7% YoY, recurring revenues +10.6% YoY (recurring gross profit = 34% of consolidated), FY26 free cash flow $114M with 124% cash conversion of non‑GAAP net income, adjusted ROIC 18.2% (Q4) / 14.7% (FY), and $98M of share repurchases in FY26 with ~$121M remaining authorization.ScanSource Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
78
Positive
Cash Flow
45
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.23B | 3.04B | 3.26B | 3.79B | 3.53B |
| Gross Profit | 437.36M | 408.65M | 399.05M | 449.24M | 426.52M |
| EBITDA | 110.34M | 132.60M | 140.88M | 170.25M | 155.06M |
| Net Income | 78.87M | 71.55M | 77.06M | 89.81M | 88.80M |
Balance Sheet | |||||
| Total Assets | 1.93B | 1.79B | 1.78B | 2.07B | 1.94B |
| Cash, Cash Equivalents and Short-Term Investments | 88.37M | 126.16M | 185.46M | 36.18M | 37.99M |
| Total Debt | 2.87M | 147.11M | 153.96M | 343.58M | 288.75M |
| Total Liabilities | 1.02B | 879.20M | 854.78M | 1.16B | 1.13B |
| Stockholders Equity | 910.79M | 906.41M | 924.25M | 905.30M | 806.53M |
Cash Flow | |||||
| Free Cash Flow | 0.00 | 104.06M | 363.09M | -45.75M | -131.20M |
| Operating Cash Flow | 0.00 | 112.35M | 371.65M | -35.77M | -124.35M |
| Investing Cash Flow | -27.51M | -62.39M | 9.04M | -8.26M | -3.72M |
| Financing Cash Flow | -134.48M | -110.91M | -227.77M | 39.53M | 108.11M |
ScanSource Technical Analysis
Positive
54.88
Price Trends
53.01
Positive
47.41
Positive
43.35
Positive
Market Momentum
-0.08
Positive
58.47
Neutral
32.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCSC, the sentiment is Positive. The current price of 54.88 is below the 20-day moving average (MA) of 54.93, above the 50-day MA of 53.01, and above the 200-day MA of 43.35, indicating a bullish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 32.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCSC.
ScanSource Risk Analysis
ScanSource disclosed 24 risk factors in its most recent earnings report. ScanSource reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ScanSource Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $20.13B | 17.81 | 13.12% | 0.77% | 16.26% | 63.20% | |
75 Outperform | $1.97B | 20.55 | 10.40% | 0.86% | 3.23% | 14.66% | |
69 Neutral | $10.46B | 13.09 | 12.14% | ― | 26.05% | 76.95% | |
69 Neutral | $4.32B | 21.35 | 13.08% | ― | 2.68% | 46.40% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $1.05B | -2,819.50 | 8.07% | ― | 3.76% | 18.30% | |
59 Neutral | $7.25B | 21.35 | 6.77% | 1.57% | 24.47% | 47.08% |
* Technology Sector Average
SCSC
ScanSource
56.39
16.48
41.29%
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CNXN
PC Connection
77.88
16.85
27.60%
SNX
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250.77
107.82
75.42%
ScanSource Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
ScanSource to Acquire MicroAge, Expanding IT Solutions
Positive
Aug 20, 2026
On August 19, 2026, ScanSource entered into a stock purchase agreement to acquire all outstanding shares of MicroAge for $220.5 million in cash, subject to customary post‑closing adjustments. The agreement includes escrowed funds, standard r...
Executive/Board Changes
ScanSource Announces Retirement of Longtime Lead Director
Neutral
Aug 17, 2026
ScanSource announced that longtime director Peter C. Browning retired from its board on August 12, 2026, after serving since 2014 and holding the role of Lead Independent Director from February 2019 to January 2026. His departure, which the compan...
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.