The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how ePlus (NASDAQ: PLUS) and the rest of the it distribution & solutions stocks fared in Q4.
IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.
The 8 it distribution & solutions stocks we track reported a mixed Q4. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q4: ePlus (NASDAQ: PLUS)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
ePlus reported revenues of $511 million, flat year on year. This print fell short of analysts’ expectations by 7.7%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS estimates.
Unsurprisingly, the stock is down 19.3% since reporting and currently trades at $65.39.
Read our full report on ePlus here, it’s free.
Best Q4: Connection (NASDAQ: CNXN)
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ: CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Connection reported revenues of $701 million, up 10.9% year on year, outperforming analysts’ expectations by 8.5%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates.
Connection pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 8.9% since reporting. It currently trades at $67.59.
Is now the time to buy Connection? Access our full analysis of the earnings results here, it’s free.
TD SYNNEX (NYSE: SNX)
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE: SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
TD SYNNEX reported revenues of $14.53 billion, up 4% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter with a miss of analysts’ EPS estimates.
As expected, the stock is down 3.3% since the results and currently trades at $121.34.
Read our full analysis of TD SYNNEX’s results here.
Insight Enterprises (NASDAQ: NSIT)
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Insight Enterprises reported revenues of $2.10 billion, down 11.6% year on year. This print came in 5.9% below analysts' expectations. Overall, it was a slower quarter for the company.
Insight Enterprises had the slowest revenue growth among its peers. The stock is down 4.2% since reporting and currently trades at $132.24.
Read our full, actionable report on Insight Enterprises here, it’s free.
CDW (NASDAQ: CDW)
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ: CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
CDW reported revenues of $5.20 billion, up 6.7% year on year. This result surpassed analysts’ expectations by 5.3%. It was an exceptional quarter as it also put up an impressive beat of analysts’ EPS estimates.
The stock is up 11.8% since reporting and currently trades at $183.38.
Read our full, actionable report on CDW here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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