58.04 USD
+0.6 (+1.04%)
CNXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 123 industry peers in the Electronic Equipment, Instruments & Components industry. While CNXN has a great health rating, its profitability is only average at the moment. CNXN is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year CNXN was profitable.
- In the past year CNXN had a positive cash flow from operations.
- CNXN had positive earnings in each of the past 5 years.
- In the past 5 years CNXN always reported a positive cash flow from operatings.
1.2 Ratios
- CNXN has a Return On Assets of 6.41%. This is in the better half of the industry: CNXN outperforms 78.86% of its industry peers.
- The Return On Equity of CNXN (9.28%) is better than 71.54% of its industry peers.
- The Return On Invested Capital of CNXN (8.12%) is better than 76.42% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CNXN is in line with the industry average of 8.87%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.41% | ||
| ROE | 9.28% | ||
| ROIC | 8.12% |
ROA(3y)7.27%
ROA(5y)6.75%
ROE(3y)10.37%
ROE(5y)10.02%
ROIC(3y)9.38%
ROIC(5y)9.24%
1.3 Margins
- CNXN has a better Profit Margin (2.91%) than 61.79% of its industry peers.
- In the last couple of years the Profit Margin of CNXN has remained more or less at the same level.
- CNXN has a Operating Margin (3.52%) which is in line with its industry peers.
- CNXN's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 18.53%, CNXN is doing worse than 67.48% of the companies in the same industry.
- In the last couple of years the Gross Margin of CNXN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.52% | ||
| PM (TTM) | 2.91% | ||
| GM | 18.53% |
OM growth 3Y1.4%
OM growth 5Y-2.74%
PM growth 3Y8.75%
PM growth 5Y1.32%
GM growth 3Y4.92%
GM growth 5Y3%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CNXN is still creating some value.
- The number of shares outstanding for CNXN has been reduced compared to 1 year ago.
- Compared to 5 years ago, CNXN has about the same amount of shares outstanding.
- There is no outstanding debt for CNXN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- CNXN has an Altman-Z score of 6.30. This indicates that CNXN is financially healthy and has little risk of bankruptcy at the moment.
- CNXN has a Altman-Z score of 6.30. This is in the better half of the industry: CNXN outperforms 78.86% of its industry peers.
- There is no outstanding debt for CNXN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 6.3 |
ROIC/WACC0.92
WACC8.86%
2.3 Liquidity
- A Current Ratio of 3.06 indicates that CNXN has no problem at all paying its short term obligations.
- The Current ratio of CNXN (3.06) is better than 61.79% of its industry peers.
- A Quick Ratio of 2.71 indicates that CNXN has no problem at all paying its short term obligations.
- The Quick ratio of CNXN (2.71) is better than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.06 | ||
| Quick Ratio | 2.71 |
3. Growth
3.1 Past
- CNXN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.28%.
- Measured over the past 5 years, CNXN shows a small growth in Earnings Per Share. The EPS has been growing by 1.20% on average per year.
- Looking at the last year, CNXN shows a small growth in Revenue. The Revenue has grown by 3.19% in the last year.
- The Revenue has been decreasing by -0.13% on average over the past years.
EPS 1Y (TTM)-5.28%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-4.9%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%-2.16%
3.2 Future
- CNXN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.91% yearly.
- Based on estimates for the next years, CNXN will show a small growth in Revenue. The Revenue will grow by 4.49% on average per year.
EPS Next Y4.02%
EPS Next 2Y8.9%
EPS Next 3Y10.91%
EPS Next 5YN/A
Revenue Next Year3.38%
Revenue Next 2Y3.97%
Revenue Next 3Y4.49%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 17.97, which indicates a rather expensive current valuation of CNXN.
- Based on the Price/Earnings ratio, CNXN is valued cheaper than 82.93% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, CNXN is valued a bit cheaper.
- With a Price/Forward Earnings ratio of 14.88, CNXN is valued correctly.
- CNXN's Price/Forward Earnings ratio is rather cheap when compared to the industry. CNXN is cheaper than 86.99% of the companies in the same industry.
- CNXN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 14.88 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CNXN is valued cheaply inside the industry as 95.94% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, CNXN is valued a bit cheaper than the industry average as 73.98% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.31 | ||
| EV/EBITDA | 7.41 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CNXN does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of CNXN may justify a higher PE ratio.
PEG (NY)4.48
PEG (5Y)15.01
EPS Next 2Y8.9%
EPS Next 3Y10.91%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.03%, CNXN has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.46, CNXN pays a better dividend. On top of this CNXN pays more dividend than 86.99% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, CNXN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
5.2 History
- The dividend of CNXN has a limited annual growth rate of 4.51%.
- CNXN has been paying a dividend for over 5 years, so it has already some track record.
- CNXN has decreased its dividend recently.
Dividend Growth(5Y)4.51%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 16.89% of the earnings are spent on dividend by CNXN. This is a low number and sustainable payout ratio.
- CNXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP16.89%
EPS Next 2Y8.9%
EPS Next 3Y10.91%
PC CONNECTION INC / CNXN FAQ
Can you provide the ChartMill fundamental rating for PC CONNECTION INC?
ChartMill assigns a fundamental rating of 6 / 10 to CNXN.
Can you provide the valuation status for PC CONNECTION INC?
ChartMill assigns a valuation rating of 5 / 10 to PC CONNECTION INC (CNXN). This can be considered as Fairly Valued.
Can you provide the profitability details for PC CONNECTION INC?
PC CONNECTION INC (CNXN) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for CNXN stock?
The Price/Earnings (PE) ratio for PC CONNECTION INC (CNXN) is 17.97 and the Price/Book (PB) ratio is 1.62.
What is the expected EPS growth for PC CONNECTION INC (CNXN) stock?
The Earnings per Share (EPS) of PC CONNECTION INC (CNXN) is expected to grow by 4.02% in the next year.