PC CONNECTION INC (CNXN) Stock Fundamental Analysis
NASDAQ:CNXN - Nasdaq - US69318J1007 - Common Stock - Currency: USD
CNXN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 125 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.
CNXN had a positive operating cash flow in the past year.
Each year in the past 5 years CNXN has been profitable.
CNXN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CNXN has a Return On Assets of 6.70%. This is amongst the best in the industry. CNXN outperforms 82.40% of its industry peers.
CNXN has a Return On Equity of 9.56%. This is in the better half of the industry: CNXN outperforms 74.40% of its industry peers.
With a decent Return On Invested Capital value of 7.76%, CNXN is doing good in the industry, outperforming 76.80% of the companies in the same industry.
CNXN had an Average Return On Invested Capital over the past 3 years of 9.38%. This is in line with the industry average of 9.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.7% | ||
| ROE | 9.56% | ||
| ROIC | 7.76% |
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
With a decent Profit Margin value of 3.11%, CNXN is doing good in the industry, outperforming 64.00% 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's Operating Margin of 3.48% is in line compared to the rest of the industry. CNXN outperforms 59.20% of its industry peers.
In the last couple of years the Operating Margin of CNXN has declined.
Looking at the Gross Margin, with a value of 18.55%, CNXN is doing worse than 67.20% of the companies in the same industry.
CNXN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.48% | ||
| PM (TTM) | 3.11% | ||
| GM | 18.55% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CNXN is creating some value.
Compared to 1 year ago, CNXN has less shares outstanding
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.
Looking at the Altman-Z score, with a value of 6.69, CNXN belongs to the top of the industry, outperforming 84.80% of the companies in the same industry.
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 | 6.69 |
ROIC/WACC0.87
WACC8.89%
2.3 Liquidity
CNXN has a Current Ratio of 3.14. This indicates that CNXN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.14, CNXN is in the better half of the industry, outperforming 68.80% of the companies in the same industry.
A Quick Ratio of 2.89 indicates that CNXN has no problem at all paying its short term obligations.
CNXN's Quick ratio of 2.89 is fine compared to the rest of the industry. CNXN outperforms 74.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.14 | ||
| Quick Ratio | 2.89 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.65% over the past year.
CNXN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.20% yearly.
Looking at the last year, CNXN shows a decrease in Revenue. The Revenue has decreased by -1.70% in the last year.
The Revenue has been decreasing by -0.13% on average over the past years.
EPS 1Y (TTM)8.65%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%20%
Revenue 1Y (TTM)-1.7%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%10.92%
3.2 Future
CNXN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.90% yearly.
CNXN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.24% yearly.
EPS Next Y3.09%
EPS Next 2Y7.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.68%
Revenue Next 2Y5.24%
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
Based on the Price/Earnings ratio of 20.08, the valuation of CNXN can be described as rather expensive.
69.60% of the companies in the same industry are more expensive than CNXN, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.22, CNXN is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 17.77, the valuation of CNXN can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CNXN indicates a somewhat cheap valuation: CNXN is cheaper than 70.40% of the companies listed in the same industry.
CNXN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.08 | ||
| Fwd PE | 17.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CNXN is valued cheaper than 82.40% of the companies in the same industry.
CNXN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CNXN is cheaper than 88.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.59 | ||
| EV/EBITDA | 9.15 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CNXN does not grow enough to justify the current Price/Earnings ratio.
CNXN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)6.51
PEG (5Y)16.78
EPS Next 2Y7.9%
EPS Next 3YN/A
5. Dividend
5.1 Amount
CNXN has a yearly dividend return of 0.75%, which is pretty low.
Compared to an average industry Dividend Yield of 2.27, CNXN pays a better dividend. On top of this CNXN pays more dividend than 84.80% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, CNXN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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
12.09% 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.
DP12.09%
EPS Next 2Y7.9%
EPS Next 3YN/A
68.08
+1.69 (+2.55%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners44.22%
Inst Owner Change1.21%
Ins Owners27.31%
Ins Owner Change0.25%
Market Cap1.76B
Analysts43.33
Price Target77.52 (13.87%)
Short Float %3%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend0.4
Dividend Growth(5Y)4.51%
DP12.09%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.77%
Min EPS beat(2)-15.03%
Max EPS beat(2)-0.5%
EPS beat(4)1
Avg EPS beat(4)-5.35%
Min EPS beat(4)-22.8%
Max EPS beat(4)16.94%
EPS beat(8)4
Avg EPS beat(8)-1.87%
EPS beat(12)7
Avg EPS beat(12)4.37%
EPS beat(16)9
Avg EPS beat(16)4.15%
Revenue beat(2)0
Avg Revenue beat(2)-2.61%
Min Revenue beat(2)-2.96%
Max Revenue beat(2)-2.26%
Revenue beat(4)1
Avg Revenue beat(4)-3.33%
Min Revenue beat(4)-10.74%
Max Revenue beat(4)2.64%
Revenue beat(8)2
Avg Revenue beat(8)-3.47%
Revenue beat(12)4
Avg Revenue beat(12)-1.77%
Revenue beat(16)8
Avg Revenue beat(16)-0.87%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-36.64%
EPS NY rev (1m)0%
EPS NY rev (3m)-9.4%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.26%
Revenue NY rev (1m)-0.56%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.08 | ||
| Fwd PE | 17.77 | ||
| P/S | 0.63 | ||
| P/FCF | 10.59 | ||
| P/OCF | 10.13 | ||
| P/B | 1.93 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 9.15 |
EPS(TTM)3.39
EY4.98%
EPS(NY)3.83
Fwd EY5.63%
FCF(TTM)6.43
FCFY9.44%
OCF(TTM)6.72
OCFY9.87%
SpS108.32
BVpS35.21
TBVpS32.28
PEG (NY)6.51
PEG (5Y)16.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.7% | ||
| ROE | 9.56% | ||
| ROCE | 10.5% | ||
| ROIC | 7.76% | ||
| ROICexc | 14.83% | ||
| ROICexgc | 17.58% | ||
| OM | 3.48% | ||
| PM (TTM) | 3.11% | ||
| GM | 18.55% | ||
| FCFM | 5.93% |
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 Turnover2.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 58.34% | ||
| Cap/Sales | 0.27% | ||
| Interest Coverage | 16246.2 | ||
| Cash Conversion | 157.4% | ||
| Profit Quality | 190.93% | ||
| Current Ratio | 3.14 | ||
| Quick Ratio | 2.89 | ||
| Altman-Z | 6.69 |
F-Score6
WACC8.89%
ROIC/WACC0.87
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)8.65%
EPS 3Y7.34%
EPS 5Y1.2%
EPS Q2Q%20%
EPS Next Y3.09%
EPS Next 2Y7.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-1.7%
Revenue growth 3Y-1.05%
Revenue growth 5Y-0.13%
Sales Q2Q%10.92%
Revenue Next Year4.68%
Revenue Next 2Y5.24%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-7.82%
EBIT growth 3Y0.34%
EBIT growth 5Y-2.86%
EBIT Next Year9.98%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-11.71%
FCF growth 3Y51.9%
FCF growth 5Y72.33%
OCF growth 1Y-12.17%
OCF growth 3Y44.4%
OCF growth 5Y36.57%