It has been about a month since the last earnings report for CDW (CDW Quick QuoteCDW - Free Report) . Shares have added about 26.5% in that time frame, outperforming the S&P 500.

But investors have to be wondering, 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 the latest earnings report in order to get a better handle on the important drivers.

CDW's Q1 Earnings Meet Estimates

CDW reported first-quarter 2026 non-GAAP earnings per share (EPS) of $2.28, matching the Zacks Consensus Estimate. The bottom line increased approximately 6.3% year over year.

CDW reported quarterly net sales of $5.68 billion, representing a 9.2% year-over-year increase. On a constant currency (cc) basis, sales grew 8.4%, reflecting healthy organic demand across the business. The strongest drivers of growth included data storage systems, servers and networking hardware, software solutions and notebooks and mobile devices. Despite ongoing economic and geopolitical uncertainty, all segments saw stronger customer spending compared with the previous-year quarter. Quarterly revenues also surpassed the consensus mark of $5.4 billion.

According to management, organizations increasingly need partners capable of managing integration, governance and lifecycle execution at scale, areas where CDW believes it has a competitive advantage. CDW’s “full-stack” approach appears increasingly valuable in this environment. Rather than simply selling hardware, the company positions itself as a long-term technology advisor helping enterprises integrate, secure and manage complex systems. The company also continues investing internally in AI initiatives, which contributed to higher operating expenses during the quarter.

The company also reinforced shareholder returns by approving a quarterly cash dividend of 63 cents per share, payable June 10, 2026, to shareholders of record as of May 25, 2026.

Management is optimistic regarding the remainder of 2026 despite continued macroeconomic and geopolitical uncertainty. CDW expects to outperform the broader U.S. IT market by 200 to 300 basis points on cc, signaling confidence in both customer demand and competitive positioning. The company’s diversified customer base across commercial, government, education and international markets is likely to help reduce dependence on any single sector.

Segmental Details

The Commercial segment served as the company’s largest revenue contributor, generating $3.57 billion in sales, up 9.6% year over year. Under commercial, several industries posted particularly strong spending trends. Financial services sales surged 28.2% to $428.4 million. Corporate customer sales rose 8.4% to $2.4 billion. Healthcare sales increased 4.9% to $766.7 million.

The Government segment also posted healthy growth, with sales rising 4.6% to $633 million.

Educationsales increased 2.5% to $675 million, reflecting continued technology spending by schools and universities.

Net sales in Other (Canadian and U.K. operations) rose 17.9% to $803 million, making it one of the fastest-growing areas of the company.

Margin Details

Gross profit increased 6% year over year to $1.19 billion. However, gross margin declined to 21% from 21.6%. The primary reason for the margin compression was a lower contribution from netted down revenue, which can affect reported profitability metrics.

Non-GAAP operating income increased 1.8% year over year to $452 million. The non-GAAP operating margin was down to 8% from 8.5%.

Selling and administrative expenses increased 7% to $814 million, primarily driven by higher compensation expenses, performance-based incentives, coworker-related costs and continued AI investments.

While margin pressure may concern some investors, management appears willing to prioritize strategic AI investments and long-term growth positioning over short-term margin expansion.

Balance Sheet and Cash Flow

As of March 31, 2026, CDW had $578.6 million of cash and cash equivalents compared with $618.7 million as of Dec. 31, 2025.

The company had a long-term debt of $5.64 billion compared with $5.63 billion as of Dec. 31, 2025.

For the three months ended on March 31, 2026, CDW generated $274.8 million of cash flow from operating activities compared with $287.2 million in the year-ago period.

Free cash flow was $248.4 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

At this time, CDW has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock has a score 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 upward for the stock, and the magnitude of these revisions looks promising. 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, Fair Isaac (FICO Quick QuoteFICO - Free Report) , has gained 3.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Fair Isaac reported revenues of $691.68 million in the last reported quarter, representing a year-over-year change of +38.7%. EPS of $12.50 for the same period compares with $7.81 a year ago.

Fair Isaac is expected to post earnings of $12.05 per share for the current quarter, representing a year-over-year change of +40.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

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 A.