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CDW Corp (CDW) to Report Q1 Earnings: What's in the Cards?

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CDW Corporation (CDW - Free Report) is set to report first-quarter 2021 results on May 5.

The Zacks Consensus Estimate for quarterly revenues is pegged at $4.61 billion, indicating a 5.06% increase from the year-ago quarter’s reported number. The consensus mark for earnings is pegged at $1.54 per share, suggesting an 11.59% year-over-year improvement.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and matched in the remaining one, the average surprise being 14.13%.

Let’s see how things have shaped up for the upcoming announcement.

CDW Corporation Price and EPS Surprise

CDW Corporation Price and EPS Surprise

CDW Corporation price-eps-surprise | CDW Corporation Quote

Factors at Play

CDW’s first-quarter performance is likely to have been driven by continued strength in the Public segment. Also, strength in the Education sector is expected to have been a tailwind.

Moreover, CDW’s strategy of supporting organic growth, alongside acquisitions, is likely to have boosted its profile significantly. The firm’s buyouts of Aptris and Scalar Decisions have been instrumental in enhancing its capabilities to solve customers’ business problems. CDW also acquired two small ServiceNow solution platforms during the fourth quarter of 2020. The integration of these solutions into its portfolio is expected to have driven demand for the firm’s products. This makes us optimistic about the upcoming results.

Additionally, some backlogs are likely to have benefited the company in the first quarter.

Nonetheless, the Healthcare sector is likely to have remained weak, which might have been a headwind for the Public segment.

Furthermore, management expects a high-single-digit sequential decline in average daily sales mainly as a result of the Census and Mississippi Department of Education. This decline is more than the sequential decline observed in a typical first quarter. This is also expected to have adversely impacted quarterly profit growth by about 200 basis points, per management.

What Our Model Says

Our proven model predicts an earnings beat for CDW this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That’s just the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

CDW currently has a Zacks Rank of 2 and an Earnings ESP of +0.51%.

Other Stocks With Favorable Combinations

Here are some other companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +4.82% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Twilio Inc. (TWLO - Free Report) has an Earnings ESP of +3.82% and a Zacks Rank of 3, currently.

Facebook, Inc. has an Earnings ESP of +1.07% and currently, a Zacks Rank of 3.

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