PC CONNECTION INC (CNXN) Stock Fundamental Analysis
USA - NASDAQ:CNXN - US69318J1007 - Common Stock
63.3 USD
+0.45 (+0.72%)
63.3 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to CNXN. CNXN was compared to 125 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year CNXN was profitable.
CNXN had a positive operating cash flow in the past year.
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.
1.2 Ratios
With an excellent Return On Assets value of 6.78%, CNXN belongs to the best of the industry, outperforming 83.20% of the companies in the same industry.
CNXN has a Return On Equity of 9.73%. This is in the better half of the industry: CNXN outperforms 74.40% of its industry peers.
CNXN's Return On Invested Capital of 8.28% is fine compared to the rest of the industry. CNXN outperforms 78.40% 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 9.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.78% | ||
| ROE | 9.73% | ||
| ROIC | 8.28% |
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 (2.97%) than 61.60% of its industry peers.
In the last couple of years the Profit Margin of CNXN has remained more or less at the same level.
With a Operating Margin value of 3.49%, CNXN perfoms like the industry average, outperforming 57.60% of the companies in the same industry.
In the last couple of years the Operating Margin of CNXN has declined.
Looking at the Gross Margin, with a value of 18.32%, CNXN is doing worse than 70.40% 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 | 3.49% | ||
| PM (TTM) | 2.97% | ||
| GM | 18.32% |
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
CNXN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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 6.74. This indicates that CNXN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.74, CNXN belongs to the top of the industry, outperforming 83.20% of the companies in the same industry.
CNXN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 6.74 |
ROIC/WACC0.89
WACC9.3%
2.3 Liquidity
A Current Ratio of 3.09 indicates that CNXN has no problem at all paying its short term obligations.
CNXN has a Current ratio of 3.09. This is in the better half of the industry: CNXN outperforms 65.60% of its industry peers.
A Quick Ratio of 2.73 indicates that CNXN has no problem at all paying its short term obligations.
CNXN's Quick ratio of 2.73 is fine compared to the rest of the industry. CNXN outperforms 70.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.73 |
3. Growth
3.1 Past
The earnings per share for CNXN have decreased by -2.38% in the last year.
The Earnings Per Share has been growing slightly by 1.20% on average over the past years.
The Revenue has been growing slightly by 4.94% in the past year.
The Revenue has been decreasing by -0.13% on average over the past years.
EPS 1Y (TTM)-2.38%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-2.02%
Revenue 1Y (TTM)4.94%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%3.15%
3.2 Future
The Earnings Per Share is expected to grow by 11.01% on average over the next years. This is quite good.
Based on estimates for the next years, CNXN will show a small growth in Revenue. The Revenue will grow by 5.67% on average per year.
EPS Next Y4.79%
EPS Next 2Y11.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year5.51%
Revenue Next 2Y5.67%
Revenue Next 3YN/A
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.
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 19.30, which indicates a rather expensive current valuation of CNXN.
CNXN's Price/Earnings ratio is rather cheap when compared to the industry. CNXN is cheaper than 84.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.41. CNXN is valued slightly cheaper when compared to this.
CNXN is valuated correctly with a Price/Forward Earnings ratio of 15.61.
CNXN's Price/Forward Earnings ratio is rather cheap when compared to the industry. CNXN is cheaper than 86.40% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.88. CNXN is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.3 | ||
| Fwd PE | 15.61 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CNXN is valued cheaply inside the industry as 89.60% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CNXN is valued a bit cheaper than 68.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.05 | ||
| EV/EBITDA | 9.71 |
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)4.03
PEG (5Y)16.13
EPS Next 2Y11.01%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.84%, 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 1.39. CNXN pays more dividend than 85.60% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, CNXN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
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.
The dividend of CNXN decreased recently.
Dividend Growth(5Y)4.51%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
15.08% 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.
DP15.08%
EPS Next 2Y11.01%
EPS Next 3YN/A
63.3
+0.45 (+0.72%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners43.49%
Inst Owner Change-3.54%
Ins Owners28.8%
Ins Owner Change-0.18%
Market Cap1.61B
Analysts43.33
Price Target77.52 (22.46%)
Short Float %2.69%
Short Ratio3.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
Yearly Dividend0.4
Dividend Growth(5Y)4.51%
DP15.08%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.78%
Min EPS beat(2)5.08%
Max EPS beat(2)20.48%
EPS beat(4)2
Avg EPS beat(4)2.51%
Min EPS beat(4)-15.03%
Max EPS beat(4)20.48%
EPS beat(8)5
Avg EPS beat(8)2.73%
EPS beat(12)7
Avg EPS beat(12)0.77%
EPS beat(16)11
Avg EPS beat(16)6.47%
Revenue beat(2)1
Avg Revenue beat(2)1.93%
Min Revenue beat(2)-2.52%
Max Revenue beat(2)6.39%
Revenue beat(4)1
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-2.96%
Max Revenue beat(4)6.39%
Revenue beat(8)3
Avg Revenue beat(8)-2.01%
Revenue beat(12)3
Avg Revenue beat(12)-2.81%
Revenue beat(16)7
Avg Revenue beat(16)-0.66%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)2.03%
EPS NQ rev (3m)-2.43%
EPS NY rev (1m)-1.17%
EPS NY rev (3m)-0.29%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.03%
Revenue NY rev (1m)-1.27%
Revenue NY rev (3m)-1.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.3 | ||
| Fwd PE | 15.61 | ||
| P/S | 0.56 | ||
| P/FCF | 36.05 | ||
| P/OCF | 30.87 | ||
| P/B | 1.82 | ||
| P/tB | 1.99 | ||
| EV/EBITDA | 9.71 |
EPS(TTM)3.28
EY5.18%
EPS(NY)4.05
Fwd EY6.41%
FCF(TTM)1.76
FCFY2.77%
OCF(TTM)2.05
OCFY3.24%
SpS114
BVpS34.85
TBVpS31.89
PEG (NY)4.03
PEG (5Y)16.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.78% | ||
| ROE | 9.73% | ||
| ROCE | 11.21% | ||
| ROIC | 8.28% | ||
| ROICexc | 13.45% | ||
| ROICexgc | 15.56% | ||
| OM | 3.49% | ||
| PM (TTM) | 2.97% | ||
| GM | 18.32% | ||
| FCFM | 1.54% |
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 Turnover2.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 60.27% | ||
| Cap/Sales | 0.26% | ||
| Interest Coverage | 25257 | ||
| Cash Conversion | 45.9% | ||
| Profit Quality | 51.81% | ||
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.73 | ||
| Altman-Z | 6.74 |
F-Score6
WACC9.3%
ROIC/WACC0.89
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)-2.38%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-2.02%
EPS Next Y4.79%
EPS Next 2Y11.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)4.94%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%3.15%
Revenue Next Year5.51%
Revenue Next 2Y5.67%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-3.54%
EBIT growth 3Y0.34%
EBIT growth 5Y-2.86%
EBIT Next Year8.59%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-73.67%
FCF growth 3Y51.9%
FCF growth 5Y72.33%
OCF growth 1Y-70.87%
OCF growth 3Y44.4%
OCF growth 5Y36.57%