PC CONNECTION INC (CNXN) Stock Fundamental Analysis
NASDAQ:CNXN - Nasdaq - US69318J1007 - Common Stock - Currency: USD
Taking everything into account, CNXN scores 6 out of 10 in our fundamental rating. 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
CNXN had positive earnings in the past year.
CNXN had a positive operating cash flow in the past year.
In the past 5 years CNXN has always been profitable.
Each year in the past 5 years CNXN had a positive operating cash flow.
1.2 Ratios
CNXN has a Return On Assets of 7.01%. This is amongst the best in the industry. CNXN outperforms 84.80% of its industry peers.
With a decent Return On Equity value of 9.97%, CNXN is doing good in the industry, outperforming 75.20% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.39%, CNXN is in the better half of the industry, outperforming 79.20% of the companies in the same industry.
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 9.16%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 9.97% | ||
| ROIC | 8.39% |
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
The Profit Margin of CNXN (3.04%) is better than 64.80% of its industry peers.
CNXN's Profit Margin has been stable in the last couple of years.
CNXN has a Operating Margin (3.53%) which is in line with its industry peers.
CNXN's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 18.43%, CNXN is not doing good in the industry: 69.60% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of CNXN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.53% | ||
| PM (TTM) | 3.04% | ||
| GM | 18.43% |
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.
CNXN has less shares outstanding than it did 1 year ago.
CNXN has about the same amout of shares outstanding than it did 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.
2.2 Solvency
An Altman-Z score of 7.02 indicates that CNXN is not in any danger for bankruptcy at the moment.
CNXN's Altman-Z score of 7.02 is amongst the best of the industry. CNXN outperforms 83.20% of its industry peers.
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 | 7.02 |
ROIC/WACC0.9
WACC9.37%
2.3 Liquidity
CNXN has a Current Ratio of 3.16. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
CNXN has a better Current ratio (3.16) than 64.80% of its industry peers.
A Quick Ratio of 2.73 indicates that CNXN has no problem at all paying its short term obligations.
CNXN has a better Quick ratio (2.73) than 69.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.16 | ||
| Quick Ratio | 2.73 |
3. Growth
3.1 Past
CNXN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.77%.
CNXN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.20% yearly.
CNXN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.21%.
CNXN shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.13% yearly.
EPS 1Y (TTM)5.77%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%2%
Revenue 1Y (TTM)4.21%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%10.92%
3.2 Future
The Earnings Per Share is expected to grow by 9.39% 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 6.01% on average per year.
EPS Next Y6.03%
EPS Next 2Y9.39%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.29%
Revenue Next 2Y6.01%
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
With a Price/Earnings ratio of 20.01, CNXN is valued on the expensive side.
76.00% of the companies in the same industry are more expensive than CNXN, based on the Price/Earnings ratio.
CNXN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
The Price/Forward Earnings ratio is 16.77, which indicates a correct valuation of CNXN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CNXN indicates a somewhat cheap valuation: CNXN is cheaper than 80.00% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. CNXN is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 16.77 |
4.2 Price Multiples
84.80% of the companies in the same industry are more expensive than CNXN, based on the Enterprise Value to EBITDA ratio.
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 | 29.67 | ||
| EV/EBITDA | 10.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CNXN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.32
PEG (5Y)16.72
EPS Next 2Y9.39%
EPS Next 3YN/A
5. Dividend
5.1 Amount
CNXN has a yearly dividend return of 0.74%, which is pretty low.
Compared to an average industry Dividend Yield of 1.76, CNXN pays a better dividend. On top of this CNXN pays more dividend than 85.60% of the companies listed in the same industry.
With a Dividend Yield of 0.74, CNXN pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
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
CNXN pays out 13.50% of its income as dividend. This is a sustainable payout ratio.
The dividend of CNXN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.5%
EPS Next 2Y9.39%
EPS Next 3YN/A
66.02
-1.24 (-1.84%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners43.73%
Inst Owner Change0%
Ins Owners28.79%
Ins Owner Change-0.12%
Market Cap1.68B
Analysts43.33
Price Target77.52 (17.42%)
Short Float %3.5%
Short Ratio3.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
Yearly Dividend0.4
Dividend Growth(5Y)4.51%
DP13.5%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.72%
Min EPS beat(2)-15.03%
Max EPS beat(2)20.48%
EPS beat(4)2
Avg EPS beat(4)5.47%
Min EPS beat(4)-15.03%
Max EPS beat(4)20.48%
EPS beat(8)5
Avg EPS beat(8)3.01%
EPS beat(12)7
Avg EPS beat(12)2.4%
EPS beat(16)10
Avg EPS beat(16)6.12%
Revenue beat(2)1
Avg Revenue beat(2)1.71%
Min Revenue beat(2)-2.96%
Max Revenue beat(2)6.39%
Revenue beat(4)2
Avg Revenue beat(4)0.95%
Min Revenue beat(4)-2.96%
Max Revenue beat(4)6.39%
Revenue beat(8)3
Avg Revenue beat(8)-2.42%
Revenue beat(12)4
Avg Revenue beat(12)-2.23%
Revenue beat(16)8
Avg Revenue beat(16)-0.48%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.53%
EPS NY rev (1m)0.88%
EPS NY rev (3m)2.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 16.77 | ||
| P/S | 0.58 | ||
| P/FCF | 29.67 | ||
| P/OCF | 26.12 | ||
| P/B | 1.91 | ||
| P/tB | 2.09 | ||
| EV/EBITDA | 10.59 |
EPS(TTM)3.3
EY5%
EPS(NY)3.94
Fwd EY5.96%
FCF(TTM)2.23
FCFY3.37%
OCF(TTM)2.53
OCFY3.83%
SpS113.04
BVpS34.53
TBVpS31.55
PEG (NY)3.32
PEG (5Y)16.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 9.97% | ||
| ROCE | 11.35% | ||
| ROIC | 8.39% | ||
| ROICexc | 13.55% | ||
| ROICexgc | 15.69% | ||
| OM | 3.53% | ||
| PM (TTM) | 3.04% | ||
| GM | 18.43% | ||
| FCFM | 1.97% |
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-Score5
Asset Turnover2.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 59.9% | ||
| Cap/Sales | 0.27% | ||
| Interest Coverage | 20293 | ||
| Cash Conversion | 56.17% | ||
| Profit Quality | 64.65% | ||
| Current Ratio | 3.16 | ||
| Quick Ratio | 2.73 | ||
| Altman-Z | 7.02 |
F-Score5
WACC9.37%
ROIC/WACC0.9
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)5.77%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%2%
EPS Next Y6.03%
EPS Next 2Y9.39%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)4.21%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%10.92%
Revenue Next Year7.29%
Revenue Next 2Y6.01%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y1.26%
EBIT growth 3Y0.34%
EBIT growth 5Y-2.86%
EBIT Next Year12.19%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-32.88%
FCF growth 3Y51.9%
FCF growth 5Y72.33%
OCF growth 1Y-30.75%
OCF growth 3Y44.4%
OCF growth 5Y36.57%