CDW Corporation CDW
Verdict: Strong sell. Fair value $127 against a price of $134 on 6 Jan 2026, 5% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. Revenue has declined for two consecutive years, from $23.75B in 2022 to $21.00B in 2024 (-11.6%)..... While still healthy, the OCF / Net Income ratio declined from a strong 1.45 in 2023 to 1.19 in....
Main risks
- Extremely High Leverage: A Debt/Equity ratio of 2.55 and an estimated Net Debt/EBITDA over 5.3x indicate significant financial risk, making the company vulnerable to economic downturns or interest rate increases.
- Negative Revenue Growth: Revenue has declined from its 2022 peak of $23.75B to $21.00B in the latest fiscal year, a clear sign of deceleration and potential market headwinds or competitive pressure.
- Low Returns on Capital (ROIC): The estimated ROIC of 7.9% is underwhelming for a technology company and is likely below its cost of capital, suggesting that despite high ROE, overall capital deployment is not creating significant value.
- Low interest coverage (2.8x)
- Revenue has declined for two consecutive years, from $23.75B in 2022 to $21.00B in 2024 (-11.6%)....
- Intense competitive environment