CDW authorizes $750M share repurchase program increase
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 07 2024
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Should l Buy CDW?
Source: SeekingAlpha
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Analyst Views on CDW
Wall Street analysts forecast CDW stock price to rise
8 Analyst Rating
5 Buy
3 Hold
0 Sell
Moderate Buy
Current: 110.200
Low
148.00
Averages
177.14
High
200.00
Current: 110.200
Low
148.00
Averages
177.14
High
200.00
About CDW
CDW Corporation is a multi-brand provider of information technology (IT) solutions to business, government, education, and healthcare customers in the United States, the United Kingdom, and Canada. Its offerings range from discrete hardware and software products to integrated IT solutions and services that include on-premises and cloud capabilities across hybrid infrastructure, digital experience, and security. Its solutions are delivered in physical, virtual, and cloud-based environments. Its segments include Corporate, Small Business, and Public. Its Corporate segment primarily serves United States private sector business customers. Its Small Business segment primarily serves United States private sector business customers. Its Public segment comprises government agencies, education and healthcare institutions in the United States. It also operates as a sales channel partner for original equipment manufacturers, software publishers, cloud providers and wholesale distributors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Strong Earnings Season for Tech Companies
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- AMD's Strong Performance: AMD reported an adjusted EPS of $1.37 for Q1, with revenue rising 38% year-over-year to $10.25 billion, while data center revenue surged 57% to $5.78 billion, surpassing analyst expectations and highlighting strong demand for its AI accelerators and processors.
- Palantir's Revenue Surge: Palantir achieved an adjusted EPS of $0.33 in Q1, with revenue skyrocketing 85% year-over-year to $1.63 billion, including a 133% increase in U.S. commercial revenue to $595 million, showcasing the company's strong growth potential in both government and commercial sectors.
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CDW CORP.: BARCLAYS LOWERS TARGET PRICE FROM $144 TO $123
Barclays Cuts Target Price: Barclays has reduced its target price for a specific stock from $144 to $123.
Market Implications: This adjustment may reflect changing market conditions or company performance expectations.
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- Crude Oil Plunge: WTI crude oil prices fell more than 7% to a two-week low as market expectations for a US-Iran peace agreement increased, easing inflation fears and contributing to stock market gains, with the 10-year Treasury yield dropping to a one-week low of 4.33%.
- Employment Data Impact: The April ADP employment report indicated that US companies added 109,000 jobs, below the expected 120,000, yet the market remains optimistic about the Fed's monetary policy, believing it will help maintain a low interest rate environment.
- International Market Surge: Overseas stock markets closed sharply higher, with the Euro Stoxx 50 rising 2.68% and China's Shanghai Composite gaining 1.17%, indicating a positive global market response to the US economic recovery, further boosting investor confidence.
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- Healthpeak Properties Strong Performance: The healthcare REIT soared 18% after first-quarter funds from operations and revenue exceeded Wall Street expectations, raising its second-quarter FFO guidance to $1.71 to $1.75, reflecting robust business momentum.
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- Aurora Innovation Partnership: Aurora Innovation's stock rose 9% following a deal to provide driverless technology to Berkshire Hathaway's McLane, which is expected to enhance its competitive edge in the long-haul trucking market.
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CDW Corporation Q1 2026 Earnings Call Highlights
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- Gross Profit Performance: The first quarter gross profit was $1.2 billion, up 6% year-over-year, although gross margin decreased by 60 basis points to 21%, it still reflects resilience in the current demand environment, indicating successful adjustments in the company's hardware product mix.
- Future Outlook: Management expects overall gross profit to grow in the low to mid-single digits for 2026, with non-GAAP net income per diluted share projected to increase at the high end of mid-single digits year-over-year, suggesting a cautiously optimistic view on market performance in the second half, particularly regarding AI-driven growth potential.
- Capital Allocation: CDW repurchased $201 million in shares and paid $81 million in dividends during the first quarter, demonstrating a continued commitment to shareholder returns, while maintaining a net debt of $5.1 billion and a cash conversion cycle of 16 days, reflecting strong financial health.
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US Stocks Surge to New Highs Led by Tech Earnings
- Tech Stock Rally: The Nasdaq 100 index surged over 1.44% to reach an all-time high, driven by strong earnings from chipmakers and AI infrastructure stocks, reflecting market optimism about sustained investment growth in artificial intelligence.
- Crude Oil Plunge: WTI crude oil prices fell more than 6% to a two-week low as the US nears a peace agreement with Iran, which is expected to lift restrictions on the Strait of Hormuz, thereby reducing energy costs and enhancing profitability prospects for airlines and cruise lines.
- Employment Data Impact: The April ADP employment change report indicated that US companies added 109,000 jobs, below the expected 120,000, yet the market remains optimistic about the Fed's monetary policy, suggesting a lower likelihood of interest rate hikes.
- Earnings Optimism: So far, 84% of the 375 S&P 500 companies that reported earnings have exceeded expectations, with Q1 earnings projected to rise 12% year-over-year, indicating strong corporate profitability that further supports the stock market's upward trend.
See More
Strong Earnings Season for Tech Companies
- Earnings Beat Expectations: In this week's earnings reports, 19 out of 20 S&P 500 tech companies exceeded profit estimates, indicating robust profitability across the sector and reinforcing the tech industry's dominant position in the market.
- AMD's Strong Performance: AMD reported an adjusted EPS of $1.37 for Q1, with revenue rising 38% year-over-year to $10.25 billion, while data center revenue surged 57% to $5.78 billion, surpassing analyst expectations and highlighting strong demand for its AI accelerators and processors.
- Palantir's Revenue Surge: Palantir achieved an adjusted EPS of $0.33 in Q1, with revenue skyrocketing 85% year-over-year to $1.63 billion, including a 133% increase in U.S. commercial revenue to $595 million, showcasing the company's strong growth potential in both government and commercial sectors.
- Super Micro Faces Challenges: Super Micro reported an adjusted EPS of $0.84 for Q3, with revenue at $10.24 billion, although this was below analyst expectations, reflecting the company's need to regain market confidence amid ongoing smuggling allegations.
See More
CDW CORP.: BARCLAYS LOWERS TARGET PRICE FROM $144 TO $123
Barclays Cuts Target Price: Barclays has reduced its target price for a specific stock from $144 to $123.
Market Implications: This adjustment may reflect changing market conditions or company performance expectations.
See More
US Stocks Surge as Tech Stocks Lead Gains
- Tech Stocks Rally: The Nasdaq 100 surged 2.08% to reach an all-time high on Wednesday, driven by stellar earnings from chipmakers and AI infrastructure firms, particularly Advanced Micro Devices, which rose over 17% as it raised its full-year sales forecast, reflecting strong investor optimism about ongoing AI investments.
- Crude Oil Plunge: WTI crude oil prices fell more than 7% to a two-week low as market expectations for a US-Iran peace agreement increased, easing inflation fears and contributing to stock market gains, with the 10-year Treasury yield dropping to a one-week low of 4.33%.
- Employment Data Impact: The April ADP employment report indicated that US companies added 109,000 jobs, below the expected 120,000, yet the market remains optimistic about the Fed's monetary policy, believing it will help maintain a low interest rate environment.
- International Market Surge: Overseas stock markets closed sharply higher, with the Euro Stoxx 50 rising 2.68% and China's Shanghai Composite gaining 1.17%, indicating a positive global market response to the US economic recovery, further boosting investor confidence.
See More
Significant Stock Price Movements for Multiple Companies
- Arm Holdings Surge: Ahead of its earnings report, Arm Holdings saw a nearly 13% jump on Nasdaq, with UBS analyst raising its 12-month price target from $175 to $245, indicating strong market optimism for its growth potential.
- Healthpeak Properties Strong Performance: The healthcare REIT soared 18% after first-quarter funds from operations and revenue exceeded Wall Street expectations, raising its second-quarter FFO guidance to $1.71 to $1.75, reflecting robust business momentum.
- CDW Stock Decline: CDW shares dropped 19% after reporting disappointing operating income in Q1, with adjusted EPS of $2.28 matching consensus, yet the company reaffirmed its 2026 outlook, raising concerns about future performance.
- Aurora Innovation Partnership: Aurora Innovation's stock rose 9% following a deal to provide driverless technology to Berkshire Hathaway's McLane, which is expected to enhance its competitive edge in the long-haul trucking market.
See More
CDW Corporation Q1 2026 Earnings Call Highlights
- Sales Growth: CDW Corporation reported a 9% year-over-year increase in net sales for Q1 2026, reaching $5.68 billion, demonstrating strong market demand in a complex environment, particularly driven by investments in AI hardware infrastructure, which enhances the company's competitive position.
- Gross Profit Performance: The first quarter gross profit was $1.2 billion, up 6% year-over-year, although gross margin decreased by 60 basis points to 21%, it still reflects resilience in the current demand environment, indicating successful adjustments in the company's hardware product mix.
- Future Outlook: Management expects overall gross profit to grow in the low to mid-single digits for 2026, with non-GAAP net income per diluted share projected to increase at the high end of mid-single digits year-over-year, suggesting a cautiously optimistic view on market performance in the second half, particularly regarding AI-driven growth potential.
- Capital Allocation: CDW repurchased $201 million in shares and paid $81 million in dividends during the first quarter, demonstrating a continued commitment to shareholder returns, while maintaining a net debt of $5.1 billion and a cash conversion cycle of 16 days, reflecting strong financial health.
See More
US Stocks Surge to New Highs Led by Tech Earnings
- Tech Stock Rally: The Nasdaq 100 index surged over 1.44% to reach an all-time high, driven by strong earnings from chipmakers and AI infrastructure stocks, reflecting market optimism about sustained investment growth in artificial intelligence.
- Crude Oil Plunge: WTI crude oil prices fell more than 6% to a two-week low as the US nears a peace agreement with Iran, which is expected to lift restrictions on the Strait of Hormuz, thereby reducing energy costs and enhancing profitability prospects for airlines and cruise lines.
- Employment Data Impact: The April ADP employment change report indicated that US companies added 109,000 jobs, below the expected 120,000, yet the market remains optimistic about the Fed's monetary policy, suggesting a lower likelihood of interest rate hikes.
- Earnings Optimism: So far, 84% of the 375 S&P 500 companies that reported earnings have exceeded expectations, with Q1 earnings projected to rise 12% year-over-year, indicating strong corporate profitability that further supports the stock market's upward trend.
See More
