PC CONNECTION INC (CNXN) Stock Fundamental Analysis
NASDAQ:CNXN - US69318J1007 - Common Stock
65.56 USD
-0.79 (-1.19%)
65.56 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to CNXN. CNXN was compared to 125 industry peers in the Electronic Equipment, Instruments & Components industry. CNXN has an excellent financial health rating, but there are some minor concerns on its profitability. CNXN has a correct valuation and a medium 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.
In the past 5 years CNXN always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 6.78%, CNXN belongs to the best of the industry, outperforming 83.20% of the companies in the same industry.
The Return On Equity of CNXN (9.73%) is better than 74.40% of its industry peers.
CNXN's Return On Invested Capital of 8.28% is fine compared to the rest of the industry. CNXN outperforms 78.40% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CNXN is in line with the industry average of 9.48%.
| 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
The Profit Margin of CNXN (2.97%) is better than 61.60% of its industry peers.
CNXN's Profit Margin has been stable in the last couple of years.
CNXN has a Operating Margin of 3.49%. This is comparable to the rest of the industry: CNXN outperforms 57.60% of its industry peers.
CNXN's Operating Margin has declined in the last couple of years.
CNXN's Gross Margin of 18.32% is on the low side compared to the rest of the industry. CNXN is outperformed by 70.40% 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 just above the Cost of Capital (WACC), so CNXN is still creating some value.
CNXN has less 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
An Altman-Z score of 6.86 indicates that CNXN is not in any danger for bankruptcy at the moment.
CNXN has a Altman-Z score of 6.86. This is amongst the best in the industry. CNXN outperforms 85.60% 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 | 6.86 |
ROIC/WACC0.9
WACC9.25%
2.3 Liquidity
CNXN has a Current Ratio of 3.09. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
CNXN has a Current ratio of 3.09. This is in the better half of the industry: CNXN outperforms 65.60% of its industry peers.
A Quick Ratio of 2.73 indicates that CNXN has no problem at all paying its short term obligations.
CNXN has a Quick ratio of 2.73. This is in the better half of the industry: CNXN outperforms 70.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.73 |
3. Growth
3.1 Past
CNXN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.38%.
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%.
The Revenue has been decreasing by -0.13% on average over the past years.
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.
Based on estimates for the next years, CNXN will show a small growth in Revenue. The Revenue will grow by 5.67% on average per year.
EPS Next Y4.79%
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 19.99.
Compared to the rest of the industry, the Price/Earnings ratio of CNXN indicates a rather cheap valuation: CNXN is cheaper than 80.80% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CNXN to the average of the S&P500 Index (27.06), we can say CNXN is valued slightly cheaper.
The Price/Forward Earnings ratio is 16.17, which indicates a correct valuation of CNXN.
Based on the Price/Forward Earnings ratio, CNXN is valued cheaply inside the industry as 82.40% of the companies are valued more expensively.
CNXN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.69.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.99 | ||
| Fwd PE | 16.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CNXN is valued cheaply inside the industry as 87.20% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CNXN indicates a somewhat cheap valuation: CNXN is cheaper than 66.40% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.34 | ||
| EV/EBITDA | 10.39 |
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)4.17
PEG (5Y)16.7
EPS Next 2Y11.01%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.86%, 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 1.49. CNXN pays more dividend than 85.60% of the companies in the same industry.
With a Dividend Yield of 0.86, CNXN pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
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.
CNXN has decreased its dividend 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
65.56
-0.79 (-1.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners43.49%
Inst Owner Change-3.54%
Ins Owners28.8%
Ins Owner Change-0.14%
Market Cap1.66B
Analysts43.33
Price Target77.52 (18.24%)
Short Float %3.14%
Short Ratio4.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
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)0.5%
EPS NQ rev (3m)-2.43%
EPS NY rev (1m)-1.17%
EPS NY rev (3m)-0.29%
Revenue NQ rev (1m)-0.98%
Revenue NQ rev (3m)-3.03%
Revenue NY rev (1m)-1.27%
Revenue NY rev (3m)-1.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.99 | ||
| Fwd PE | 16.17 | ||
| P/S | 0.58 | ||
| P/FCF | 37.34 | ||
| P/OCF | 31.97 | ||
| P/B | 1.88 | ||
| P/tB | 2.06 | ||
| EV/EBITDA | 10.39 |
EPS(TTM)3.28
EY5%
EPS(NY)4.05
Fwd EY6.18%
FCF(TTM)1.76
FCFY2.68%
OCF(TTM)2.05
OCFY3.13%
SpS114
BVpS34.85
TBVpS31.89
PEG (NY)4.17
PEG (5Y)16.7
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 | 6.86 |
F-Score6
WACC9.25%
ROIC/WACC0.9
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 Y4.79%
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%