PC CONNECTION INC (CNXN) Stock Fundamental Analysis
NASDAQ:CNXN - Nasdaq - US69318J1007 - Common Stock - Currency: USD
Overall CNXN gets a fundamental rating of 6 out of 10. We evaluated CNXN against 124 industry peers in the Electronic Equipment, Instruments & Components industry. CNXN is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. CNXN has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years CNXN has been profitable.
In the past 5 years CNXN always reported a positive cash flow from operatings.
1.2 Ratios
CNXN's Return On Assets of 6.70% is amongst the best of the industry. CNXN outperforms 81.67% of its industry peers.
The Return On Equity of CNXN (9.56%) is better than 72.50% of its industry peers.
The Return On Invested Capital of CNXN (7.76%) is better than 73.33% of its industry peers.
CNXN had an Average Return On Invested Capital over the past 3 years of 9.38%. This is in line with the industry average of 8.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.7% | ||
| ROE | 9.56% | ||
| ROIC | 7.76% |
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's Profit Margin of 3.11% 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 remained more or less at the same level.
Looking at the Operating Margin, with a value of 3.48%, CNXN is in line with its industry, outperforming 58.33% of the companies in the same industry.
CNXN's Operating Margin has declined in the last couple of years.
The Gross Margin of CNXN (18.55%) is worse than 70.00% of its industry peers.
In the last couple of years the Gross Margin of CNXN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.48% | ||
| PM (TTM) | 3.11% | ||
| GM | 18.55% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CNXN is creating some value.
Compared to 1 year ago, CNXN has less shares outstanding
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
An Altman-Z score of 6.69 indicates that CNXN is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.69, CNXN belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
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 | 6.69 |
ROIC/WACC0.86
WACC9.06%
2.3 Liquidity
CNXN has a Current Ratio of 3.14. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of CNXN (3.14) is better than 63.33% of its industry peers.
A Quick Ratio of 2.89 indicates that CNXN has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.89, CNXN is doing good in the industry, outperforming 74.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.14 | ||
| Quick Ratio | 2.89 |
3. Growth
3.1 Past
CNXN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.11%.
CNXN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.20% yearly.
Looking at the last year, CNXN shows a decrease in Revenue. The Revenue has decreased by -1.70% in the last year.
The Revenue has been decreasing by -0.13% on average over the past years.
EPS 1Y (TTM)4.11%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-13.33%
Revenue 1Y (TTM)-1.7%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%1.78%
3.2 Future
Based on estimates for the next years, CNXN will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.25% on average per year.
The Revenue is expected to grow by 5.63% on average over the next years.
EPS Next Y8.05%
EPS Next 2Y14.25%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.29%
Revenue Next 2Y5.63%
Revenue Next 3YN/A
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
With a Price/Earnings ratio of 19.77, CNXN is valued on the expensive side.
Based on the Price/Earnings ratio, CNXN is valued a bit cheaper than 78.33% of the companies in the same industry.
CNXN is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.29, which indicates a rather expensive current valuation of CNXN.
76.67% of the companies in the same industry are more expensive than CNXN, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of CNXN to the average of the S&P500 Index (22.68), we can say CNXN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.77 | ||
| Fwd PE | 18.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CNXN indicates a rather cheap valuation: CNXN is cheaper than 85.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CNXN indicates a rather cheap valuation: CNXN is cheaper than 90.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.28 | ||
| EV/EBITDA | 9.15 |
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.
CNXN's earnings are expected to grow with 14.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.46
PEG (5Y)16.52
EPS Next 2Y14.25%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.69%, CNXN is not a good candidate for dividend investing.
CNXN's Dividend Yield is rather good when compared to the industry average which is at 1.92. CNXN pays more dividend than 85.83% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, CNXN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
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
CNXN pays out 12.09% of its income as dividend. This is a sustainable payout ratio.
CNXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP12.09%
EPS Next 2Y14.25%
EPS Next 3YN/A
65.03
-0.26 (-0.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners44.22%
Inst Owner Change0%
Ins Owners27.31%
Ins Owner Change0.17%
Market Cap1.71B
Analysts43.33
Price Target77.52 (19.21%)
Short Float %1.66%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend0.4
Dividend Growth(5Y)4.51%
DP12.09%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.77%
Min EPS beat(2)-15.03%
Max EPS beat(2)-0.5%
EPS beat(4)1
Avg EPS beat(4)-5.35%
Min EPS beat(4)-22.8%
Max EPS beat(4)16.94%
EPS beat(8)4
Avg EPS beat(8)-1.87%
EPS beat(12)7
Avg EPS beat(12)4.37%
EPS beat(16)9
Avg EPS beat(16)4.15%
Revenue beat(2)0
Avg Revenue beat(2)-2.61%
Min Revenue beat(2)-2.96%
Max Revenue beat(2)-2.26%
Revenue beat(4)1
Avg Revenue beat(4)-3.33%
Min Revenue beat(4)-10.74%
Max Revenue beat(4)2.64%
Revenue beat(8)2
Avg Revenue beat(8)-3.47%
Revenue beat(12)4
Avg Revenue beat(12)-1.77%
Revenue beat(16)8
Avg Revenue beat(16)-0.87%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-15.27%
EPS NQ rev (3m)-8.26%
EPS NY rev (1m)-5.04%
EPS NY rev (3m)-7.8%
Revenue NQ rev (1m)-4.17%
Revenue NQ rev (3m)-4.07%
Revenue NY rev (1m)-0.99%
Revenue NY rev (3m)-0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.77 | ||
| Fwd PE | 18.29 | ||
| P/S | 0.61 | ||
| P/FCF | 10.28 | ||
| P/OCF | 9.84 | ||
| P/B | 1.88 | ||
| P/tB | 2.05 | ||
| EV/EBITDA | 9.15 |
EPS(TTM)3.29
EY5.06%
EPS(NY)3.55
Fwd EY5.47%
FCF(TTM)6.32
FCFY9.72%
OCF(TTM)6.61
OCFY10.17%
SpS106.54
BVpS34.64
TBVpS31.76
PEG (NY)2.46
PEG (5Y)16.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.7% | ||
| ROE | 9.56% | ||
| ROCE | 10.5% | ||
| ROIC | 7.76% | ||
| ROICexc | 14.83% | ||
| ROICexgc | 17.58% | ||
| OM | 3.48% | ||
| PM (TTM) | 3.11% | ||
| GM | 18.55% | ||
| FCFM | 5.93% |
ROA(3y)7.27%
ROA(5y)6.75%
ROE(3y)10.37%
ROE(5y)10.02%
ROIC(3y)9.38%
ROIC(5y)9.24%
ROICexc(3y)14.03%
ROICexc(5y)12.66%
ROICexgc(3y)16.27%
ROICexgc(5y)14.67%
ROCE(3y)12.69%
ROCE(5y)12.51%
ROICexcg growth 3Y8.7%
ROICexcg growth 5Y-0.74%
ROICexc growth 3Y7.7%
ROICexc growth 5Y-0.84%
OM growth 3Y1.4%
OM growth 5Y-2.74%
PM growth 3Y8.75%
PM growth 5Y1.32%
GM growth 3Y4.92%
GM growth 5Y3%
F-Score6
Asset Turnover2.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 58.34% | ||
| Cap/Sales | 0.27% | ||
| Interest Coverage | 16246.2 | ||
| Cash Conversion | 157.4% | ||
| Profit Quality | 190.93% | ||
| Current Ratio | 3.14 | ||
| Quick Ratio | 2.89 | ||
| Altman-Z | 6.69 |
F-Score6
WACC9.06%
ROIC/WACC0.86
Cap/Depr(3y)69.99%
Cap/Depr(5y)75.1%
Cap/Sales(3y)0.3%
Cap/Sales(5y)0.34%
Profit Quality(3y)148.69%
Profit Quality(5y)111.78%
High Growth Momentum
Growth
EPS 1Y (TTM)4.11%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-13.33%
EPS Next Y8.05%
EPS Next 2Y14.25%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-1.7%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%1.78%
Revenue Next Year4.29%
Revenue Next 2Y5.63%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-7.82%
EBIT growth 3Y0.34%
EBIT growth 5Y-2.86%
EBIT Next Year23.42%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-11.71%
FCF growth 3Y51.9%
FCF growth 5Y72.33%
OCF growth 1Y-12.17%
OCF growth 3Y44.4%
OCF growth 5Y36.57%