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CDW Corporation (CDW) is a technology solutions provider that supports businesses, government agencies, schools, and healthcare organizations with a wide range of IT products and services. The company is headquartered in Vernon Hills, Illinois, and focuses on helping customers build, manage, and optimize their technology environments. CDW has a market capitalization of $14.16 billion.
Shrinking profitability margins amid a shifting sales mix towards lower-margin hardware have pressured CDW’s stock. Over the past 52 weeks, the stock has dropped 39.6%, and it is down 18.6% year-to-date (YTD). The stock reached a 52-week low of $97.12 on May 12 but is up 14.1% from that level.
On the other hand, the broader S&P 500 Index ($SPX) has gained 27.9% and 9.2% over the same periods, respectively, indicating that the stock has underperformed the broader market over the past year. Next, we compare the stock with its own sector. The State Street Technology Select Sector SPDR ETF (XLK) is up 57.3% over the past 52 weeks and 25.3% YTD. Therefore, the stock has also underperformed its sector over these periods.
CDW’s topline exceeded analysts’ estimates for the first quarter of fiscal 2026. The company’s revenue increased 9.2% year-over-year (YOY) to $5.68 billion. However, its non-GAAP operating income margin dropped from 8.5% to 8%. CDW has a target to exceed the U.S. IT addressable market growth by 200 to 300 basis points (on a constant currency basis). CDW also authorized a $1 billion increase to the company’s share repurchase program.
For the current quarter, Wall Street analysts expect CDW’s EPS to grow 5.7% YOY to $2.61 on a diluted basis. Moreover, EPS is expected to increase 4.9% annually to $10 in fiscal 2026, followed by an 8.7% improvement to $10.87 in fiscal 2027. The company has a solid history of surpassing consensus estimates, topping them in three of the four trailing quarters.
Among the 12 Wall Street analysts covering CDW’s stock, the consensus is a “Moderate Buy.” That’s based on six “Strong Buy” ratings and six “Holds.” The ratings configuration has remained the same over the past three months.
This month, Citigroup analyst Asiya Merchant maintained a “Neutral” rating on CDW, lowering the price target to $123 from $150, reflecting a cautious outlook on the stock.
CDW’s mean price target of $147.30 indicates a 32.9% upside over current market prices. The Street-high price target of $195 implies a 76% upside.
