It has been about a month since the last earnings report for CDW (CDW Quick QuoteCDW - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CDW due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

CDW's Q1 Earnings Miss Estimates

CDW Corporation reported first-quarter 2024 non-GAAP earnings per share (EPS) of $1.92, which missed the Zacks Consensus Estimate of $2.16. Also, the bottom line declined 5.5% year over year.

The company’s revenues decreased 4.5% year over year to $4.872 billion. Net sales decreased 4.9% at constant currency. The downtick was caused due to weakness across all business segments. However, quarterly revenues beat the consensus mark of $4.396 billion.

Quarterly Details

Net sales of CDW’s Corporate segment amounted to $2.136 billion, declining 3.1% on a year-over-year basis.

The Small Business segment’s net sales of $381 million declined 7.4% year over year.

The Public segment’s net sales amounted to $1.725 billion, down 4.9% from the year-ago quarter. Revenues from Education customers declined 10.4%.

Revenues from Healthcare decreased 1.8%, while revenues from Government decreased 1.5%.

Net sales in Other (Canadian and U.K. operations) declined 6.5% to $631 million.

CDW’s gross profit of $1.063 billion decreased 2.4% on a year-over-year basis. The gross margin expanded 50 basis points (bps) to 21.8% due to the favorable contribution of netted-down revenues, primarily software as a service.

The non-GAAP operating income decreased 7.1% year over year to $403.5 million. Additionally, the non-GAAP operating margin fell 20 bps to 8.3%.

Selling and administrative expenses increased 0.2% year over year to $735.3 million, primarily due to workplace optimization costs.

Balance Sheet and Cash Flow

As of Mar 31, 2024, CDW had $803.8 million of cash and cash equivalents compared with $588.7 million as of Dec 31, 2023.

The company has a long-term debt of $5.02 billion, lower than $5.03 billion as of Dec 31, 2023.

For the first quarter, CDW generated $440 million of cash flow from operating activities compared with $365 million in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, CDW has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise CDW has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

CDW is part of the Zacks Computers - IT Services industry. Over the past month, Fair Isaac (FICO Quick QuoteFICO - Free Report) , a stock from the same industry, has gained 11.8%. The company reported its results for the quarter ended March 2024 more than a month ago.

Fair Isaac reported revenues of $433.81 million in the last reported quarter, representing a year-over-year change of +14.1%. EPS of $6.14 for the same period compares with $4.78 a year ago.

For the current quarter, Fair Isaac is expected to post earnings of $6.38 per share, indicating a change of +12.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Fair Isaac has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.