Stock of the Day

November 30, 2020

CDW (CDW)

$178.21
+$2.38 (+1.4%)
Market Cap: $23.44B

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.

CDW Bull Case

Here are some ways that investors could benefit from investing in CDW Co.:

  • CDW Co. recently reported strong quarterly earnings, with earnings per share (EPS) of $2.15, exceeding expectations, which indicates robust financial performance.
  • The company has shown a revenue increase of 6.7% compared to the same quarter last year, reflecting growth in its business operations.
  • CDW Co. has a high return on equity of 55.42%, suggesting effective management and profitability relative to shareholder equity.
  • The current stock price is around $185, which may be considered attractive for investors looking for growth potential.
  • CDW Co. has initiated a share buyback plan, indicating that the board believes the stock is undervalued, which can enhance shareholder value.

CDW Bear Case

Investors should be bearish about investing in CDW Co. for these reasons:

  • The company has a relatively high debt-to-equity ratio of 2.38, which may indicate higher financial risk due to reliance on debt financing.
  • Despite recent growth, the market can be volatile, and CDW Co.'s stock price has fluctuated significantly over the past year.
  • With a price-to-earnings (P/E) ratio of 23.21, the stock may be considered overvalued compared to industry peers, which could deter value investors.
  • Institutional investors own a significant 93.15% of the company's stock, which may limit the influence of retail investors on company decisions.
  • The competitive landscape in the information technology services sector is intense, which could impact future growth and profitability.
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