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PC CONNECTION INC (CNXN) Stock Fundamental Analysis

NASDAQ:CNXN - Nasdaq - US69318J1007 - Common Stock

71.99  -0.4 (-0.55%)

Fundamental Rating

6

Taking everything into account, CNXN scores 6 out of 10 in our fundamental rating. CNXN was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. Both the health and profitability get an excellent rating, making CNXN a very profitable company, without any liquidiy or solvency issues. CNXN has a decent growth rate and is not valued too expensively. This makes CNXN very considerable for quality investing!


Dividend Valuation Growth Profitability Health

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7

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.
CNXN had a positive operating cash flow in each of the past 5 years.
CNXN Yearly Net Income VS EBIT VS OCF VS FCFCNXN Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M

1.2 Ratios

CNXN has a Return On Assets of 7.01%. This is amongst the best in the industry. CNXN outperforms 81.67% of its industry peers.
Looking at the Return On Equity, with a value of 10.05%, CNXN is in the better half of the industry, outperforming 73.33% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.23%, CNXN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CNXN is in line with the industry average of 9.03%.
Industry RankSector Rank
ROA 7.01%
ROE 10.05%
ROIC 8.23%
ROA(3y)7.19%
ROA(5y)7.16%
ROE(3y)10.6%
ROE(5y)10.86%
ROIC(3y)10.09%
ROIC(5y)10.28%
CNXN Yearly ROA, ROE, ROICCNXN Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

CNXN's Profit Margin of 3.23% is fine compared to the rest of the industry. CNXN outperforms 62.50% of its industry peers.
In the last couple of years the Profit Margin of CNXN has grown nicely.
CNXN has a Operating Margin of 3.68%. This is comparable to the rest of the industry: CNXN outperforms 57.50% of its industry peers.
In the last couple of years the Operating Margin of CNXN has grown nicely.
The Gross Margin of CNXN (18.63%) is worse than 70.00% of its industry peers.
CNXN's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 3.68%
PM (TTM) 3.23%
GM 18.63%
OM growth 3Y9.63%
OM growth 5Y2.94%
PM growth 3Y10.69%
PM growth 5Y4.07%
GM growth 3Y3.55%
GM growth 5Y3.34%
CNXN Yearly Profit, Operating, Gross MarginsCNXN Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15

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8

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CNXN is destroying value.
Compared to 1 year ago, CNXN has about the same amount of shares outstanding.
The number of shares outstanding for CNXN remains at a similar level compared to 5 years ago.
CNXN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
CNXN Yearly Shares OutstandingCNXN Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 5M 10M 15M 20M 25M
CNXN Yearly Total Debt VS Total AssetsCNXN Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

2.2 Solvency

An Altman-Z score of 7.00 indicates that CNXN is not in any danger for bankruptcy at the moment.
CNXN's Altman-Z score of 7.00 is amongst the best of the industry. CNXN outperforms 82.50% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 7
ROIC/WACC0.78
WACC10.55%
CNXN Yearly LT Debt VS Equity VS FCFCNXN Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

2.3 Liquidity

A Current Ratio of 3.13 indicates that CNXN has no problem at all paying its short term obligations.
CNXN has a Current ratio of 3.13. This is in the better half of the industry: CNXN outperforms 62.50% of its industry peers.
CNXN has a Quick Ratio of 2.82. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
CNXN's Quick ratio of 2.82 is fine compared to the rest of the industry. CNXN outperforms 69.17% of its industry peers.
Industry RankSector Rank
Current Ratio 3.13
Quick Ratio 2.82
CNXN Yearly Current Assets VS Current LiabilitesCNXN Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 14.81% over the past year.
CNXN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
The Revenue has decreased by -3.36% in the past year.
The Revenue has been growing slightly by 1.10% on average over the past years.
EPS 1Y (TTM)14.81%
EPS 3Y13.87%
EPS 5Y5.48%
EPS Q2Q%5.15%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y3.24%
Revenue growth 5Y1.1%
Sales Q2Q%4.56%

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 10.94% yearly.
CNXN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.00% yearly.
EPS Next Y12.01%
EPS Next 2Y8.84%
EPS Next 3Y10.94%
EPS Next 5YN/A
Revenue Next Year-0.45%
Revenue Next 2Y2.31%
Revenue Next 3Y4%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
CNXN Yearly Revenue VS EstimatesCNXN Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1B 2B 3B
CNXN Yearly EPS VS EstimatesCNXN Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4

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5

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 21.11, which indicates a rather expensive current valuation of CNXN.
CNXN's Price/Earnings ratio is a bit cheaper when compared to the industry. CNXN is cheaper than 75.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, CNXN is valued a bit cheaper.
CNXN is valuated rather expensively with a Price/Forward Earnings ratio of 19.23.
75.00% of the companies in the same industry are more expensive than CNXN, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.44. CNXN is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 21.11
Fwd PE 19.23
CNXN Price Earnings VS Forward Price EarningsCNXN Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, CNXN is valued a bit cheaper than 80.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CNXN is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 12.33
EV/EBITDA 10.47
CNXN Per share dataCNXN EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80 100

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CNXN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.76
PEG (5Y)3.85
EPS Next 2Y8.84%
EPS Next 3Y10.94%

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3

5. Dividend

5.1 Amount

With a yearly dividend of 0.57%, CNXN is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.87, CNXN pays a better dividend. On top of this CNXN pays more dividend than 85.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, CNXN's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.57%

5.2 History

The dividend of CNXN decreases each year by -1.41%.
CNXN has been paying a dividend for over 5 years, so it has already some track record.
The dividend of CNXN decreased recently.
Dividend Growth(5Y)-1.41%
Div Incr Years1
Div Non Decr Years1
CNXN Yearly Dividends per shareCNXN Yearly Dividends per shareYearly Dividends per share 2018 2019 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

5.3 Sustainability

CNXN pays out 11.10% of its income as dividend. This is a sustainable payout ratio.
DP11.1%
EPS Next 2Y8.84%
EPS Next 3Y10.94%
CNXN Yearly Income VS Free CF VS DividendCNXN Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M
CNXN Dividend Payout.CNXN Dividend Payout, showing the Payout Ratio.CNXN Dividend Payout.PayoutRetained Earnings

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PC CONNECTION INC

NASDAQ:CNXN (1/22/2025, 2:42:52 PM)

71.99

-0.4 (-0.55%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)10-30 2024-10-30/amc
Earnings (Next)02-06 2025-02-06/amc
Inst Owners43.98%
Inst Owner Change0%
Ins Owners27.31%
Ins Owner Change0.01%
Market Cap1.89B
Analysts43.33
Price Target77.52 (7.68%)
Short Float %1.76%
Short Ratio2.82
Dividend
Industry RankSector Rank
Dividend Yield 0.57%
Yearly Dividend0.32
Dividend Growth(5Y)-1.41%
DP11.1%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)8.22%
Min EPS beat(2)-0.5%
Max EPS beat(2)16.94%
EPS beat(4)2
Avg EPS beat(4)-1.52%
Min EPS beat(4)-22.8%
Max EPS beat(4)16.94%
EPS beat(8)4
Avg EPS beat(8)-0.65%
EPS beat(12)8
Avg EPS beat(12)7.21%
EPS beat(16)9
Avg EPS beat(16)4.96%
Revenue beat(2)1
Avg Revenue beat(2)0.19%
Min Revenue beat(2)-2.26%
Max Revenue beat(2)2.64%
Revenue beat(4)2
Avg Revenue beat(4)-2.25%
Min Revenue beat(4)-10.74%
Max Revenue beat(4)2.64%
Revenue beat(8)2
Avg Revenue beat(8)-3.65%
Revenue beat(12)5
Avg Revenue beat(12)-1.12%
Revenue beat(16)9
Avg Revenue beat(16)-0.58%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.49%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.64%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.27%
Valuation
Industry RankSector Rank
PE 21.11
Fwd PE 19.23
P/S 0.68
P/FCF 12.33
P/OCF 11.76
P/B 2.11
P/tB 2.3
EV/EBITDA 10.47
EPS(TTM)3.41
EY4.74%
EPS(NY)3.74
Fwd EY5.2%
FCF(TTM)5.84
FCFY8.11%
OCF(TTM)6.12
OCFY8.5%
SpS106.11
BVpS34.13
TBVpS31.24
PEG (NY)1.76
PEG (5Y)3.85
Profitability
Industry RankSector Rank
ROA 7.01%
ROE 10.05%
ROCE 11.19%
ROIC 8.23%
ROICexc 15.44%
ROICexgc 18.29%
OM 3.68%
PM (TTM) 3.23%
GM 18.63%
FCFM 5.5%
ROA(3y)7.19%
ROA(5y)7.16%
ROE(3y)10.6%
ROE(5y)10.86%
ROIC(3y)10.09%
ROIC(5y)10.28%
ROICexc(3y)12.97%
ROICexc(5y)12.72%
ROICexgc(3y)14.89%
ROICexgc(5y)14.72%
ROCE(3y)13.73%
ROCE(5y)13.99%
ROICexcg growth 3Y13.99%
ROICexcg growth 5Y-1.42%
ROICexc growth 3Y14.12%
ROICexc growth 5Y-0.33%
OM growth 3Y9.63%
OM growth 5Y2.94%
PM growth 3Y10.69%
PM growth 5Y4.07%
GM growth 3Y3.55%
GM growth 5Y3.34%
F-Score8
Asset Turnover2.17
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 57.12%
Cap/Sales 0.27%
Interest Coverage 3544.21
Cash Conversion 138.98%
Profit Quality 170.23%
Current Ratio 3.13
Quick Ratio 2.82
Altman-Z 7
F-Score8
WACC10.55%
ROIC/WACC0.78
Cap/Depr(3y)78.68%
Cap/Depr(5y)101.99%
Cap/Sales(3y)0.33%
Cap/Sales(5y)0.46%
Profit Quality(3y)107.67%
Profit Quality(5y)76.25%
High Growth Momentum
Growth
EPS 1Y (TTM)14.81%
EPS 3Y13.87%
EPS 5Y5.48%
EPS Q2Q%5.15%
EPS Next Y12.01%
EPS Next 2Y8.84%
EPS Next 3Y10.94%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y3.24%
Revenue growth 5Y1.1%
Sales Q2Q%4.56%
Revenue Next Year-0.45%
Revenue Next 2Y2.31%
Revenue Next 3Y4%
Revenue Next 5YN/A
EBIT growth 1Y1.06%
EBIT growth 3Y13.18%
EBIT growth 5Y4.07%
EBIT Next Year22.32%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y181.59%
FCF growth 3Y95.86%
FCF growth 5Y23.49%
OCF growth 1Y148.65%
OCF growth 3Y76.34%
OCF growth 5Y17.92%