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Why Is CDW (CDW) Down 1.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for CDW (CDW - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CDW due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for CDW Corporation before we dive into how investors and analysts have reacted as of late.
CDW's Q3 Earnings Beat Estimates
CDW reported third-quarter 2025 non-GAAP earnings per share (EPS) of $2.71, surpassing the Zacks Consensus Estimate of $2.53. Also, the bottom line increased 3% year over year.
The company’s revenues increased 4% year over year to $5.74 billion. On a constant currency (cc) basis, sales grew 3.8%, showing broad-based demand across product categories, such as notebooks/mobile devices, software, networking (netcomm) products, desktops and services, despite a slowdown in data storage and servers. Despite ongoing macroeconomic uncertainty, some end markets showed signs of improved customer spending during the quarter. Quarterly revenues also exceeded the consensus estimate of $5.7 billion.
Looking ahead, CDW reaffirmed its goal to outpace the U.S. IT market growth by 200–300 basis points at cc.
Segmental Details
Net sales of CDW’s Corporate segment amounted to $2.25 billion, growing 4.4% on a year-over-year basis.
The Small Business segment’s net sales of $434 million rose 14.2% year over year.
The Public segment’s revenues totaled $2.35 billion, up 0.6% from the year-ago quarter. The uptick was driven by a 7.8% and 6.9% surge in net sales of Government customers and Healthcare customers, respectively, offset by an 8.5% decline in the Education sector.
Net sales in Other (Canadian and U.K. operations) rose 9.1% to $698 million.
Margin Details
Gross profit grew 4.6% year over year to $1.26 billion. Gross profit margin rose slightly to 21.9% from 21.8%, driven by higher service rates and more netted-down revenue.
The non-GAAP operating income fell 0.6% year over year to $530.6 million. The non-GAAP operating margin was down to 9.2% from 9.7%.
Selling and administrative expenses surged 12.9% year over year to $812 million due to higher performance-based pay, transformation costs and amortization of acquired intangibles.
Balance Sheet and Cash Flow
As of Sept. 30, 2025, CDW had $452.9 million of cash and cash equivalents compared with $946.7 million a year ago.
The company has a long-term debt of $5.62 billion, higher than $5.6 billion in the previous year.
For the nine months that ended on Sept. 30, 2025, CDW generated $771.4 million of cash flow from operating activities compared with $932 million in the year-ago period. Free cash flow was $692.2 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, CDW has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. 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. Interestingly, CDW has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CDW belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, Roper Technologies (ROP - Free Report) , has gained 0% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Roper Technologies reported revenues of $2.02 billion in the last reported quarter, representing a year-over-year change of +14.3%. EPS of $5.14 for the same period compares with $4.62 a year ago.
Roper Technologies is expected to post earnings of $5.13 per share for the current quarter, representing a year-over-year change of +6.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Roper Technologies. Also, the stock has a VGM Score of D.
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Why Is CDW (CDW) Down 1.8% Since Last Earnings Report?
It has been about a month since the last earnings report for CDW (CDW - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CDW due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for CDW Corporation before we dive into how investors and analysts have reacted as of late.
CDW's Q3 Earnings Beat Estimates
CDW reported third-quarter 2025 non-GAAP earnings per share (EPS) of $2.71, surpassing the Zacks Consensus Estimate of $2.53. Also, the bottom line increased 3% year over year.
The company’s revenues increased 4% year over year to $5.74 billion. On a constant currency (cc) basis, sales grew 3.8%, showing broad-based demand across product categories, such as notebooks/mobile devices, software, networking (netcomm) products, desktops and services, despite a slowdown in data storage and servers. Despite ongoing macroeconomic uncertainty, some end markets showed signs of improved customer spending during the quarter. Quarterly revenues also exceeded the consensus estimate of $5.7 billion.
Looking ahead, CDW reaffirmed its goal to outpace the U.S. IT market growth by 200–300 basis points at cc.
Segmental Details
Net sales of CDW’s Corporate segment amounted to $2.25 billion, growing 4.4% on a year-over-year basis.
The Small Business segment’s net sales of $434 million rose 14.2% year over year.
The Public segment’s revenues totaled $2.35 billion, up 0.6% from the year-ago quarter. The uptick was driven by a 7.8% and 6.9% surge in net sales of Government customers and Healthcare customers, respectively, offset by an 8.5% decline in the Education sector.
Net sales in Other (Canadian and U.K. operations) rose 9.1% to $698 million.
Margin Details
Gross profit grew 4.6% year over year to $1.26 billion. Gross profit margin rose slightly to 21.9% from 21.8%, driven by higher service rates and more netted-down revenue.
The non-GAAP operating income fell 0.6% year over year to $530.6 million. The non-GAAP operating margin was down to 9.2% from 9.7%.
Selling and administrative expenses surged 12.9% year over year to $812 million due to higher performance-based pay, transformation costs and amortization of acquired intangibles.
Balance Sheet and Cash Flow
As of Sept. 30, 2025, CDW had $452.9 million of cash and cash equivalents compared with $946.7 million a year ago.
The company has a long-term debt of $5.62 billion, higher than $5.6 billion in the previous year.
For the nine months that ended on Sept. 30, 2025, CDW generated $771.4 million of cash flow from operating activities compared with $932 million in the year-ago period. Free cash flow was $692.2 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, CDW has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. 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. Interestingly, CDW has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CDW belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, Roper Technologies (ROP - Free Report) , has gained 0% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Roper Technologies reported revenues of $2.02 billion in the last reported quarter, representing a year-over-year change of +14.3%. EPS of $5.14 for the same period compares with $4.62 a year ago.
Roper Technologies is expected to post earnings of $5.13 per share for the current quarter, representing a year-over-year change of +6.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Roper Technologies. Also, the stock has a VGM Score of D.