PC CONNECTION INC (CNXN) Stock Fundamental Analysis
USA - NASDAQ:CNXN - US69318J1007 - Common Stock
62.09 USD
+0.89 (+1.45%)
62.09 USD
0 (0%)
Taking everything into account, CNXN scores 6 out of 10 in our fundamental rating. CNXN was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. While CNXN has a great health rating, its profitability is only average at the moment. CNXN has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
CNXN had positive earnings in the past year.
In the past year CNXN had a positive cash flow from operations.
In the past 5 years CNXN has always been profitable.
In the past 5 years CNXN always reported a positive cash flow from operatings.
1.2 Ratios
CNXN has a better Return On Assets (6.78%) than 83.06% of its industry peers.
Looking at the Return On Equity, with a value of 9.73%, CNXN is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
CNXN has a better Return On Invested Capital (8.28%) than 78.23% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CNXN is in line with the industry average of 9.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.78% | ||
| ROE | 9.73% | ||
| ROIC | 8.28% |
ROA(3y)7.27%
ROA(5y)6.75%
ROE(3y)10.37%
ROE(5y)10.02%
ROIC(3y)9.38%
ROIC(5y)9.24%
1.3 Margins
Looking at the Profit Margin, with a value of 2.97%, CNXN is in the better half of the industry, outperforming 61.29% of the companies in the same industry.
In the last couple of years the Profit Margin of CNXN has remained more or less at the same level.
CNXN has a Operating Margin of 3.49%. This is comparable to the rest of the industry: CNXN outperforms 57.26% of its industry peers.
In the last couple of years the Operating Margin of CNXN has declined.
CNXN has a worse Gross Margin (18.32%) than 70.97% of its industry peers.
In the last couple of years the Gross Margin of CNXN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.49% | ||
| PM (TTM) | 2.97% | ||
| GM | 18.32% |
OM growth 3Y1.4%
OM growth 5Y-2.74%
PM growth 3Y8.75%
PM growth 5Y1.32%
GM growth 3Y4.92%
GM growth 5Y3%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CNXN is destroying value.
The number of shares outstanding for CNXN has been reduced compared to 1 year ago.
Compared to 5 years ago, CNXN has about the same amount of shares outstanding.
CNXN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
CNXN has an Altman-Z score of 6.69. This indicates that CNXN is financially healthy and has little risk of bankruptcy at the moment.
CNXN has a better Altman-Z score (6.69) than 83.87% of its industry peers.
CNXN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 6.69 |
ROIC/WACC0.88
WACC9.44%
2.3 Liquidity
A Current Ratio of 3.09 indicates that CNXN has no problem at all paying its short term obligations.
CNXN's Current ratio of 3.09 is fine compared to the rest of the industry. CNXN outperforms 65.32% of its industry peers.
A Quick Ratio of 2.73 indicates that CNXN has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.73, CNXN is in the better half of the industry, outperforming 70.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.73 |
3. Growth
3.1 Past
The earnings per share for CNXN have decreased by -2.38% in the last year.
The Earnings Per Share has been growing slightly by 1.20% on average over the past years.
CNXN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.94%.
CNXN shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.13% yearly.
EPS 1Y (TTM)-2.38%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-2.02%
Revenue 1Y (TTM)4.94%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%3.15%
3.2 Future
Based on estimates for the next years, CNXN will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.01% on average per year.
The Revenue is expected to grow by 5.67% on average over the next years.
EPS Next Y6.19%
EPS Next 2Y11.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year5.51%
Revenue Next 2Y5.67%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
CNXN is valuated rather expensively with a Price/Earnings ratio of 18.93.
CNXN's Price/Earnings ratio is rather cheap when compared to the industry. CNXN is cheaper than 84.68% of the companies in the same industry.
CNXN is valuated rather cheaply when we compare the Price/Earnings ratio to 27.54, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.31, CNXN is valued correctly.
CNXN's Price/Forward Earnings ratio is rather cheap when compared to the industry. CNXN is cheaper than 87.90% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.05, CNXN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.93 | ||
| Fwd PE | 15.31 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CNXN indicates a rather cheap valuation: CNXN is cheaper than 90.32% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CNXN is valued a bit cheaper than 69.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.36 | ||
| EV/EBITDA | 9.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CNXN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.06
PEG (5Y)15.82
EPS Next 2Y11.01%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, CNXN is not a good candidate for dividend investing.
CNXN's Dividend Yield is rather good when compared to the industry average which is at 2.15. CNXN pays more dividend than 84.68% of the companies in the same industry.
With a Dividend Yield of 0.89, CNXN pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
The dividend of CNXN has a limited annual growth rate of 4.51%.
CNXN has been paying a dividend for over 5 years, so it has already some track record.
The dividend of CNXN decreased recently.
Dividend Growth(5Y)4.51%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
15.08% of the earnings are spent on dividend by CNXN. This is a low number and sustainable payout ratio.
CNXN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP15.08%
EPS Next 2Y11.01%
EPS Next 3YN/A
62.09
+0.89 (+1.45%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners42.86%
Inst Owner Change-3.54%
Ins Owners28.2%
Ins Owner Change-0.2%
Market Cap1.58B
Analysts43.33
Price Target77.52 (24.85%)
Short Float %2.69%
Short Ratio3.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend0.4
Dividend Growth(5Y)4.51%
DP15.08%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.78%
Min EPS beat(2)5.08%
Max EPS beat(2)20.48%
EPS beat(4)2
Avg EPS beat(4)2.51%
Min EPS beat(4)-15.03%
Max EPS beat(4)20.48%
EPS beat(8)5
Avg EPS beat(8)2.73%
EPS beat(12)7
Avg EPS beat(12)0.77%
EPS beat(16)11
Avg EPS beat(16)6.47%
Revenue beat(2)1
Avg Revenue beat(2)1.93%
Min Revenue beat(2)-2.52%
Max Revenue beat(2)6.39%
Revenue beat(4)1
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-2.96%
Max Revenue beat(4)6.39%
Revenue beat(8)3
Avg Revenue beat(8)-2.01%
Revenue beat(12)3
Avg Revenue beat(12)-2.81%
Revenue beat(16)7
Avg Revenue beat(16)-0.66%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.95%
EPS NY rev (1m)1.33%
EPS NY rev (3m)0.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.93 | ||
| Fwd PE | 15.31 | ||
| P/S | 0.54 | ||
| P/FCF | 35.36 | ||
| P/OCF | 30.28 | ||
| P/B | 1.78 | ||
| P/tB | 1.95 | ||
| EV/EBITDA | 9.44 |
EPS(TTM)3.28
EY5.28%
EPS(NY)4.05
Fwd EY6.53%
FCF(TTM)1.76
FCFY2.83%
OCF(TTM)2.05
OCFY3.3%
SpS114
BVpS34.85
TBVpS31.89
PEG (NY)3.06
PEG (5Y)15.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.78% | ||
| ROE | 9.73% | ||
| ROCE | 11.21% | ||
| ROIC | 8.28% | ||
| ROICexc | 13.45% | ||
| ROICexgc | 15.56% | ||
| OM | 3.49% | ||
| PM (TTM) | 2.97% | ||
| GM | 18.32% | ||
| FCFM | 1.54% |
ROA(3y)7.27%
ROA(5y)6.75%
ROE(3y)10.37%
ROE(5y)10.02%
ROIC(3y)9.38%
ROIC(5y)9.24%
ROICexc(3y)14.03%
ROICexc(5y)12.66%
ROICexgc(3y)16.27%
ROICexgc(5y)14.67%
ROCE(3y)12.69%
ROCE(5y)12.51%
ROICexcg growth 3Y8.7%
ROICexcg growth 5Y-0.74%
ROICexc growth 3Y7.7%
ROICexc growth 5Y-0.84%
OM growth 3Y1.4%
OM growth 5Y-2.74%
PM growth 3Y8.75%
PM growth 5Y1.32%
GM growth 3Y4.92%
GM growth 5Y3%
F-Score6
Asset Turnover2.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 60.27% | ||
| Cap/Sales | 0.26% | ||
| Interest Coverage | 25257 | ||
| Cash Conversion | 45.9% | ||
| Profit Quality | 51.81% | ||
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.73 | ||
| Altman-Z | 6.69 |
F-Score6
WACC9.44%
ROIC/WACC0.88
Cap/Depr(3y)69.99%
Cap/Depr(5y)75.1%
Cap/Sales(3y)0.3%
Cap/Sales(5y)0.34%
Profit Quality(3y)148.69%
Profit Quality(5y)111.78%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.38%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%-2.02%
EPS Next Y6.19%
EPS Next 2Y11.01%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)4.94%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%3.15%
Revenue Next Year5.51%
Revenue Next 2Y5.67%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-3.54%
EBIT growth 3Y0.34%
EBIT growth 5Y-2.86%
EBIT Next Year8.59%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-73.67%
FCF growth 3Y51.9%
FCF growth 5Y72.33%
OCF growth 1Y-70.87%
OCF growth 3Y44.4%
OCF growth 5Y36.57%