PC CONNECTION INC (CNXN)
US69318J1007 - Common Stock
CNXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 127 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year CNXN was profitable.
CNXN had a positive operating cash flow in the past year.
CNXN had positive earnings in each of the past 5 years.
CNXN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 7.01%, CNXN belongs to the best of the industry, outperforming 81.75% of the companies in the same industry.
CNXN has a Return On Equity of 9.91%. This is in the better half of the industry: CNXN outperforms 71.43% of its industry peers.
With a decent Return On Invested Capital value of 9.03%, CNXN is doing good in the industry, outperforming 73.02% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CNXN is in line with the industry average of 9.45%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 9.91% | ||
| ROIC | 9.03% |
ROA(3y)7.19%
ROA(5y)7.16%
ROE(3y)10.6%
ROE(5y)10.86%
ROIC(3y)10.09%
ROIC(5y)10.28%
1.3 Margins
With a Profit Margin value of 2.92%, CNXN perfoms like the industry average, outperforming 59.52% of the companies in the same industry.
In the last couple of years the Profit Margin of CNXN has grown nicely.
CNXN has a Operating Margin (3.71%) which is in line with its industry peers.
CNXN's Operating Margin has improved in the last couple of years.
CNXN has a Gross Margin of 17.95%. This is in the lower half of the industry: CNXN underperforms 69.05% of its industry peers.
In the last couple of years the Gross Margin of CNXN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.71% | ||
| PM (TTM) | 2.92% | ||
| GM | 17.95% |
OM growth 3Y9.63%
OM growth 5Y2.94%
PM growth 3Y10.69%
PM growth 5Y4.07%
GM growth 3Y3.55%
GM growth 5Y3.34%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CNXN is still creating some value.
CNXN has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for CNXN remains at a similar level compared to 5 years ago.
There is no outstanding debt for CNXN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
CNXN has an Altman-Z score of 7.14. This indicates that CNXN is financially healthy and has little risk of bankruptcy at the moment.
CNXN has a better Altman-Z score (7.14) than 84.92% of its industry peers.
There is no outstanding debt for CNXN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 7.14 |
ROIC/WACC0.97
WACC9.27%
2.3 Liquidity
A Current Ratio of 3.20 indicates that CNXN has no problem at all paying its short term obligations.
CNXN has a better Current ratio (3.20) than 64.29% of its industry peers.
CNXN has a Quick Ratio of 2.82. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
CNXN has a Quick ratio of 2.82. This is in the better half of the industry: CNXN outperforms 73.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.2 | ||
| Quick Ratio | 2.82 |
3. Growth
3.1 Past
CNXN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.51%.
CNXN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.48% yearly.
CNXN shows a decrease in Revenue. In the last year, the revenue decreased by -8.78%.
Measured over the past years, CNXN shows a small growth in Revenue. The Revenue has been growing by 1.10% on average per year.
EPS 1Y (TTM)-6.51%
EPS 3Y13.87%
EPS 5Y5.48%
EPS growth Q2Q26.76%
Revenue 1Y (TTM)-8.78%
Revenue growth 3Y3.24%
Revenue growth 5Y1.1%
Revenue growth Q2Q-4.92%
3.2 Future
CNXN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.55% yearly.
CNXN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.09% yearly.
EPS Next Y13.14%
EPS Next 2Y11.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year5.41%
Revenue Next 2Y5.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.61, CNXN is valued on the expensive side.
CNXN's Price/Earnings ratio is a bit cheaper when compared to the industry. CNXN is cheaper than 69.84% of the companies in the same industry.
CNXN is valuated rather cheaply when we compare the Price/Earnings ratio to 24.55, which is the current average of the S&P500 Index.
CNXN is valuated rather expensively with a Price/Forward Earnings ratio of 17.33.
Based on the Price/Forward Earnings ratio, CNXN is valued a bit cheaper than 72.22% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.92, CNXN is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.61 | ||
| Fwd PE | 17.33 |
4.2 Price Multiples
75.40% of the companies in the same industry are more expensive than CNXN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CNXN is valued cheaply inside the industry as 91.27% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.67 | ||
| EV/EBITDA | 10 |
4.3 Compensation for Growth
CNXN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CNXN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.49
PEG (5Y)3.58
EPS Next 2Y11.55%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.53%, 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 1.75. CNXN pays more dividend than 84.13% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, CNXN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
5.2 History
The dividend of CNXN decreases each year by -1.41%.
CNXN has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)-1.41%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
10.10% of the earnings are spent on dividend by CNXN. This is a low number and sustainable payout ratio.
DP10.1%
EPS Next 2Y11.55%
EPS Next 3YN/A
PC CONNECTION INC
NASDAQ:CNXN (5/1/2024, 7:00:01 PM)
After market: 62 +0.04 (+0.06%)61.96
-0.01 (-0.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.63B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.61 | ||
| Fwd PE | 17.33 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.49
PEG (5Y)3.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 9.91% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 3.71% | ||
| PM (TTM) | 2.92% | ||
| GM | 17.95% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover2.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.2 | ||
| Quick Ratio | 2.82 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-6.51%
EPS 3Y13.87%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.14%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-8.78%
Revenue growth 3Y3.24%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y