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CDW Gears Up to Post Q1 Earnings: Is a Beat in the Offing?
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CDW Corporation (CDW - Free Report) is slated to report first-quarter 2025 results on May 7, before market open. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for revenues is $4.89 billion, suggesting 0.4% growth from the year-ago quarter’s reported figure.
The consensus estimate for earnings is pegged at $1.96 per share, unchanged in the past 60 days, indicating an increase of 2.08% from the year-ago quarter’s reported figure.
CDW’s earnings missed the Zacks Consensus Estimate in three of the last four quarters while beating once, with the average negative surprise being 3.1%.
Factors Shaping CDW’s Upcoming Q1 Results
Increasing momentum across the cloud and SaaS is likely to have aided CDW’s top line in the first quarter. Security and cloud revenues are expected to have benefited as customers' spending priorities include cost optimization, data protection and workforce productivity. CDW remains focused on expanding its cloud and SaaS business to sustain revenue growth amid challenges in the hardware sector.
Elevated demand for consumer devices like Notebooks and Chromebooks, coupled with steady growth in software and services, is likely to have acted as a major driving force. We expect revenues from Notebooks/Mobile Devices to be $1185.9 million, up 3.9% year over year. Our estimate for Software and Services revenues is currently pegged at $889.4 million and $436.4 million, respectively. Expanding workloads and surging data, rising security threats, aging client devices and the rising adoption of AI-powered tools and applications are likely to have driven growth against a volatile macroeconomic landscape.
In the fourth quarter, revenues from Corporate, Small Business, Public and Healthcare rose 2.6%, 2.7%, 4.4% and 27.5%, respectively, while Government and Education fell 7.1% and 3.7%. For the first quarter, we expect revenues from Corporate, Government and Healthcare to be $2120.3 million, $512.4 million and $552.3 million, down 0.7%, 5.7% and 5.5%, respectively. Revenues from the Education sector and Small Business are estimated to be $668.7 million and $382.4 million, up 12% and 0.4%, respectively.
Nonetheless, the company faces risks from a cautious customer approach as it continues to deal with pressing challenges, such as managing growing workloads, strengthening security against rising threats and upgrading aging client devices. Uncertain macroeconomic conditions and a complex technology landscape continue to dampen demand for hardware solutions, showing less sign of immediate recovery.
Slower public spending in federal and education and rising uncertainty in the U.K. and Canada due to economic and political turmoil are likely to weigh on CDW’s performance in the to-be-reported quarter.
What Our Model Says for CDW
Our proven model predicts an earnings beat for CDW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
CDW currently has an Earnings ESP of +1.02% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other stocks you may want to consider, as our model shows that these, too, have the right elements to post an earnings beat in this reporting cycle.
The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.43 billion and $1.30 per share, respectively. EXPD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 11.6%.
GXO Logistics (GXO - Free Report) currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The company is slated to report first-quarter 2025 results on May 7. The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.91 billion and 26 cents per share, respectively.
Shares of GXO have declined 27.1% in the past year.
Sonos (SONO - Free Report) currently has an Earnings ESP of +25.71% and a Zacks Rank of 3. The company is slated to report quarterly results on May 7. The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues and loss are pegged at $255.9 million and 18 cents per share, respectively.
Shares of SONO have declined 47.1% in the past year.
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CDW Gears Up to Post Q1 Earnings: Is a Beat in the Offing?
CDW Corporation (CDW - Free Report) is slated to report first-quarter 2025 results on May 7, before market open. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for revenues is $4.89 billion, suggesting 0.4% growth from the year-ago quarter’s reported figure.
The consensus estimate for earnings is pegged at $1.96 per share, unchanged in the past 60 days, indicating an increase of 2.08% from the year-ago quarter’s reported figure.
CDW’s earnings missed the Zacks Consensus Estimate in three of the last four quarters while beating once, with the average negative surprise being 3.1%.
Factors Shaping CDW’s Upcoming Q1 Results
Increasing momentum across the cloud and SaaS is likely to have aided CDW’s top line in the first quarter. Security and cloud revenues are expected to have benefited as customers' spending priorities include cost optimization, data protection and workforce productivity. CDW remains focused on expanding its cloud and SaaS business to sustain revenue growth amid challenges in the hardware sector.
Elevated demand for consumer devices like Notebooks and Chromebooks, coupled with steady growth in software and services, is likely to have acted as a major driving force. We expect revenues from Notebooks/Mobile Devices to be $1185.9 million, up 3.9% year over year. Our estimate for Software and Services revenues is currently pegged at $889.4 million and $436.4 million, respectively. Expanding workloads and surging data, rising security threats, aging client devices and the rising adoption of AI-powered tools and applications are likely to have driven growth against a volatile macroeconomic landscape.
In the fourth quarter, revenues from Corporate, Small Business, Public and Healthcare rose 2.6%, 2.7%, 4.4% and 27.5%, respectively, while Government and Education fell 7.1% and 3.7%. For the first quarter, we expect revenues from Corporate, Government and Healthcare to be $2120.3 million, $512.4 million and $552.3 million, down 0.7%, 5.7% and 5.5%, respectively. Revenues from the Education sector and Small Business are estimated to be $668.7 million and $382.4 million, up 12% and 0.4%, respectively.
CDW Corporation Price and EPS Surprise
CDW Corporation price-eps-surprise | CDW Corporation Quote
Nonetheless, the company faces risks from a cautious customer approach as it continues to deal with pressing challenges, such as managing growing workloads, strengthening security against rising threats and upgrading aging client devices. Uncertain macroeconomic conditions and a complex technology landscape continue to dampen demand for hardware solutions, showing less sign of immediate recovery.
Slower public spending in federal and education and rising uncertainty in the U.K. and Canada due to economic and political turmoil are likely to weigh on CDW’s performance in the to-be-reported quarter.
What Our Model Says for CDW
Our proven model predicts an earnings beat for CDW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
CDW currently has an Earnings ESP of +1.02% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other stocks you may want to consider, as our model shows that these, too, have the right elements to post an earnings beat in this reporting cycle.
Expeditors International of Washington (EXPD - Free Report) has an Earnings ESP of +3.76% and a Zacks Rank #3 at present. EXPD is scheduled to report first-quarter 2025 earnings on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.43 billion and $1.30 per share, respectively. EXPD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 11.6%.
GXO Logistics (GXO - Free Report) currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The company is slated to report first-quarter 2025 results on May 7. The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.91 billion and 26 cents per share, respectively.
Shares of GXO have declined 27.1% in the past year.
Sonos (SONO - Free Report) currently has an Earnings ESP of +25.71% and a Zacks Rank of 3. The company is slated to report quarterly results on May 7. The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues and loss are pegged at $255.9 million and 18 cents per share, respectively.
Shares of SONO have declined 47.1% in the past year.