CDW (NASDAQ:CDW) Shares Gap Down – Time to Sell?

CDW Corporation (NASDAQ:CDW)’s share price gapped down before the market opened on Wednesday . The stock had previously closed at $154.00, but opened at $115.45. CDW shares last traded at $132.83, with a volume of 1,799,802 shares.

Key Stories Impacting CDW

Here are the key news stories impacting CDW this week:

• Positive Sentiment: Q2 results exceeded expectations. Revenue increased 10% year over year to $6.57 billion, ahead of the $6.21 billion consensus estimate, while adjusted EPS of $2.91 surpassed expectations of $2.80 and rose from $2.60 a year earlier. CDW Q2 Earnings and Sales Beat
• Positive Sentiment: Demand remained broad-based. Commercial sales grew 9.2%, government sales increased 13.6%, and international sales rose 22.9%, with AI and infrastructure spending supporting growth. Management raised its full-year outlook to mid-single-digit gross-profit growth and adjusted EPS growth at the high end of the high-single-digit range. CDW Q2 Revenue Rises 10 Percent
• Positive Sentiment: Shareholder returns continue. CDW declared a quarterly dividend of $0.630 per share, payable September 10 to shareholders of record on August 25. CDW Declares Quarterly Cash Dividend
• Neutral Sentiment: Chief Financial Officer Albert J. Miralles announced plans to retire, initiating a leadership transition. The change may increase near-term uncertainty, although no immediate operational impact was reported. CDW CFO Retirement and Leadership Transition
• Negative Sentiment: Margins missed expectations. Gross-profit margin fell to 20.1% from 20.8%, gross profit grew only 6.3%, and operating income increased 2.0%—well below the pace of revenue growth. Management indicated that margins could remain below 2025 levels as sales shift toward larger, lower-margin infrastructure projects and suggested gross profit may be roughly flat sequentially in the third quarter. CDW Shares Fall on Margin Miss
• Negative Sentiment: Cash conversion weakened. First-half adjusted free cash flow declined to $278.4 million from $458.9 million a year earlier, reflecting increased inventory and working-capital investment. Investors appear more focused on the durability of earnings quality and profitability than on the headline beat.

Wall Street Analyst Weigh In

A number of research analysts have commented on CDW shares. JPMorgan Chase & Co. raised CDW from a “neutral” rating to an “overweight” rating and set a $130.00 price target for the company in a research report on Wednesday, May 27th. Morgan Stanley raised CDW from an “equal weight” rating to an “overweight” rating and boosted their target price for the company from $142.00 to $170.00 in a research note on Tuesday, June 23rd. Raymond James Financial set a $150.00 price target on CDW in a research note on Wednesday, May 6th. Citigroup boosted their price objective on shares of CDW from $123.00 to $145.00 and gave the company a “neutral” rating in a research report on Monday, July 13th. Finally, Barclays dropped their target price on shares of CDW from $144.00 to $123.00 and set an “equal weight” rating for the company in a research report on Thursday, May 7th. One equities research analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and three have given a Hold rating to the stock. Based on data from MarketBeat, CDW currently has a consensus rating of “Moderate Buy” and a consensus price target of $146.88.

CDW Stock Performance

The company has a debt-to-equity ratio of 1.81, a quick ratio of 1.06 and a current ratio of 1.16. The business’s 50-day moving average is $134.75 and its 200-day moving average is $127.52. The company has a market capitalization of $17.46 billion, a PE ratio of 16.62, a PEG ratio of 1.96 and a beta of 0.96.

CDW (NASDAQ:CDW) last announced its quarterly earnings data on Wednesday, August 5th. The information technology services provider reported $2.91 earnings per share for the quarter, topping analysts’ consensus estimates of $2.80 by $0.11. CDW had a net margin of 4.70% and a return on equity of 49.67%. The business had revenue of $6.57 billion for the quarter, compared to analysts’ expectations of $6.21 billion. During the same quarter in the prior year, the company earned $2.60 earnings per share. The business’s revenue was up 10.0% compared to the same quarter last year. On average, research analysts anticipate that CDW Corporation will post 10.21 earnings per share for the current year.

Insider Transactions at CDW

In related news, Director David W. Nelms acquired 18,000 shares of the stock in a transaction on Wednesday, May 27th. The stock was acquired at an average price of $111.43 per share, for a total transaction of $2,005,740.00. Following the completion of the purchase, the director owned 51,025 shares of the company’s stock, valued at $5,685,715.75. This represents a 54.50% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Insiders own 0.82% of the company’s stock.

Hedge Funds Weigh In On CDW

Institutional investors and hedge funds have recently modified their holdings of the stock. Jones Financial Companies Lllp boosted its stake in CDW by 316.0% in the 1st quarter. Jones Financial Companies Lllp now owns 4,896 shares of the information technology services provider’s stock worth $785,000 after purchasing an additional 3,719 shares in the last quarter. Empowered Funds LLC raised its holdings in CDW by 1.2% in the first quarter. Empowered Funds LLC now owns 18,076 shares of the information technology services provider’s stock worth $2,897,000 after buying an additional 216 shares during the last quarter. California State Teachers Retirement System lifted its stake in shares of CDW by 0.6% in the second quarter. California State Teachers Retirement System now owns 225,709 shares of the information technology services provider’s stock worth $40,309,000 after buying an additional 1,242 shares in the last quarter. BI Asset Management Fondsmaeglerselskab A S lifted its stake in shares of CDW by 1,339.7% in the second quarter. BI Asset Management Fondsmaeglerselskab A S now owns 49,380 shares of the information technology services provider’s stock worth $8,819,000 after buying an additional 45,950 shares in the last quarter. Finally, State of Tennessee Department of Treasury grew its holdings in shares of CDW by 17.7% during the second quarter. State of Tennessee Department of Treasury now owns 40,927 shares of the information technology services provider’s stock valued at $7,309,000 after buying an additional 6,143 shares during the last quarter. 93.15% of the stock is currently owned by institutional investors.

CDW Company Profile

CDW (NASDAQ: CDW) is a leading provider of information technology products and integrated solutions for business, government, education and healthcare customers. The company sources and resells hardware and software from major technology vendors and packages those products with professional services, managed services and lifecycle support. Its offerings span IT infrastructure, cloud and data center solutions, cybersecurity, networking, unified communications, endpoint devices, and software licensing and procurement services designed to simplify IT operations for customers.

CDW combines a broad product portfolio with consultative sales, implementation and technical support capabilities.