In a world where technology underpins nearly every aspect of our lives, CDW Corporation stands at the forefront, reshaping how businesses and institutions harness IT solutions. With a robust portfolio that spans hardware, software, and integrated services, CDW not only addresses the diverse needs of its clients but also sets industry standards for innovation and quality. As we delve into this analysis, I invite you to consider whether CDW’s strong fundamentals continue to justify its current market valuation and growth potential.
Table of contents
Company Description
CDW Corporation, founded in 1984 and headquartered in Vernon Hills, Illinois, is a prominent player in the Information Technology Services industry. The company operates primarily in the United States, the United Kingdom, and Canada, offering a wide range of IT solutions through its Corporate, Small Business, and Public segments. CDW provides an array of hardware and software products, along with integrated IT solutions that encompass on-premise, hybrid, and cloud capabilities. Their offerings include everything from notebooks and network devices to application suites and security software. With a strong focus on innovation and customer service, CDW plays a crucial role in shaping the IT landscape, particularly for government, education, and healthcare sectors, while emphasizing sustainable and efficient technology solutions.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of CDW Corporation, focusing on its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table outlines the key financial metrics from CDW Corporation’s income statements over the past five fiscal years, providing insights into revenue generation, profitability, and overall financial health.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 18.47B | 20.82B | 23.75B | 21.38B | 20.99B |
| Cost of Revenue | 15.26B | 17.25B | 19.06B | 16.72B | 16.40B |
| Operating Expenses | 2.03B | 2.15B | 2.95B | 2.97B | 2.95B |
| Gross Profit | 3.21B | 3.57B | 4.69B | 4.65B | 4.60B |
| EBITDA | 1.58B | 1.64B | 2.01B | 1.95B | 1.93B |
| EBIT | 1.16B | 1.45B | 1.72B | 1.68B | 1.65B |
| Interest Expense | 155M | 151M | 236M | 227M | 215M |
| Net Income | 789M | 989M | 1.11B | 1.10B | 1.08B |
| EPS | 5.53 | 7.14 | 8.24 | 8.20 | 8.06 |
| Filing Date | 2021-02-26 | 2022-02-28 | 2023-02-24 | 2024-02-26 | 2025-02-21 |
Over the five-year period, CDW’s revenue peaked in 2022 at 23.75B before declining in the subsequent years, indicating a potential stabilization in market conditions. Despite this revenue contraction, net income showed resilience, maintaining close to 1.1B in both 2022 and 2023, and slightly declining to 1.08B in 2024. Gross margins have remained relatively stable, suggesting effective cost controls. In the most recent year, while revenue decreased, the company managed to keep operating expenses flat, demonstrating effective risk management and operational efficiency, which could bode well for future performance.
Financial Ratios
The following table summarizes the key financial ratios for CDW Corporation over the last five fiscal years.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 4.27% | 4.75% | 4.69% | 5.17% | 5.13% |
| ROE | N/A | N/A | N/A | N/A | N/A |
| ROIC | N/A | N/A | N/A | N/A | N/A |
| P/E | 23.83 | 28.69 | 21.66 | 27.71 | 21.61 |
| P/B | 14.49 | 40.19 | 15.06 | 14.98 | 9.90 |
| Current Ratio | 1.53 | 1.27 | 1.33 | 1.23 | 1.35 |
| Quick Ratio | 1.33 | 1.09 | 1.17 | 1.11 | 1.24 |
| D/E | 3.52 | 10.42 | 3.80 | 2.84 | 2.55 |
| Debt-to-Assets | 48.87% | 55.71% | 46.44% | 43.73% | 40.82% |
| Interest Coverage | 7.61 | 9.40 | 7.36 | 7.42 | 7.70 |
| Asset Turnover | 1.98 | 1.58 | 1.81 | 1.61 | 1.43 |
| Fixed Asset Turnover | 60.29 | 59.25 | 70.26 | 65.91 | 67.26 |
| Dividend Yield | 1.17% | 0.83% | 1.17% | 1.05% | 1.43% |
Interpretation of Financial Ratios
In the most recent year (2024), CDW’s net margin of 5.13% indicates a slight improvement, which is a positive sign. However, the P/E ratio of 21.61 suggests the stock may be slightly overvalued compared to earnings. The company maintains a healthy current ratio of 1.35 and an interest coverage ratio of 7.70, indicating good short-term liquidity and ability to cover interest expenses. Nonetheless, the high debt-to-equity ratio of 2.55 raises concerns about leverage.
Evolution of Financial Ratios
Over the past five years, CDW’s net margin has shown a steady improvement, reflecting enhanced profitability. However, the significant fluctuations in the P/E and P/B ratios suggest varying market perceptions of the company’s value, while the debt ratios indicate a trend of increasing leverage, which warrants close monitoring.
Distribution Policy
CDW Corporation maintains a dividend payout ratio of approximately 30.8%, with a trend of increasing dividends per share, currently at $2.48. The annual dividend yield stands at 1.43%, suggesting a healthy return on investment for shareholders. Additionally, CDW engages in share buyback programs, enhancing shareholder value. However, investors should consider potential risks, such as unsustainable distributions or excessive repurchases, that could affect long-term value creation. Overall, the current distribution strategy supports sustainable growth for shareholders.
Sector Analysis
CDW Corporation operates in the Information Technology Services sector, providing comprehensive IT solutions across various segments and facing competition from major players like Insight Enterprises and SHI International.
Strategic Positioning
CDW Corporation holds a significant position in the Information Technology Services sector, with a market capitalization of approximately $18.9B. The company has a competitive advantage through its diverse offerings across corporate, small business, and public segments, capturing a substantial market share in integrated IT solutions. However, competitive pressure from emerging startups and established players poses a threat, particularly as technological disruptions in cloud computing and cybersecurity continue to evolve. It is crucial for CDW to innovate and adapt to maintain its market position and address these challenges effectively.
Revenue by Segment
The pie chart below illustrates the revenue distribution by segment for CDW Corporation over the fiscal year 2024.
In fiscal year 2024, CDW’s revenue showed a strong reliance on its Software Products segment, contributing $3.80B, followed by Services at $1.87B and Total Hardware at $15.22B. While the Software Products segment experienced modest growth, the overall trend indicates a slight decline in Total Hardware revenue compared to the previous year. The Services segment demonstrated resilience with a notable increase, highlighting its importance in CDW’s portfolio. However, with slowing growth in hardware sales, there may be margin risks if this trend continues, necessitating careful monitoring for potential impacts on profitability.
Key Products
Below is a table summarizing the key products offered by CDW Corporation, highlighting their descriptions to give you a clearer understanding of their offerings.
| Product | Description |
|---|---|
| Notebooks & Mobile Devices | A range of portable computing devices designed for business and educational use, offering mobility and performance. |
| Network Communications | Equipment and solutions that facilitate effective communication and data transfer within and across networks. |
| Desktop Computers | Powerful desktop systems tailored for various business needs, including performance-intensive tasks. |
| Video Monitors | High-resolution displays suitable for professional environments, enhancing visual productivity. |
| Enterprise & Data Storage | Comprehensive storage solutions that ensure data integrity and accessibility across business operations. |
| Application Suites | Software bundles designed to meet specific business needs, providing integrated functionalities. |
| Security Software | Tools aimed at protecting IT infrastructure from cyber threats, ensuring data security and compliance. |
| Virtualization Software | Solutions that enable resource optimization and workload management in data centers. |
| Network Management | Software tools designed to monitor and manage network performance, ensuring reliability and efficiency. |
| Advisory & Design Services | Professional consulting services to help businesses design and implement effective IT strategies. |
This table provides a glimpse into CDW’s diverse product lineup, catering to various sectors, including corporate, small business, and public markets. Understanding these products can help you evaluate their potential impact on your investment strategy.
Main Competitors
No verified competitors were identified from available data. CDW Corporation holds a significant position in the Information Technology Services sector, with an estimated market share reflecting its strong presence in the U.S., U.K., and Canadian markets. The company operates mainly in the corporate, small business, and public segments, showcasing its competitive strength and versatility in providing a range of IT solutions.
Competitive Advantages
CDW Corporation stands out in the Information Technology Services sector due to its comprehensive range of IT solutions that cater to various customer segments, including government, education, healthcare, and businesses of all sizes. The company’s diverse product offerings, including hardware, software, and integrated IT solutions, position it well to capture market share. Looking ahead, CDW has opportunities to expand into emerging markets and enhance its cloud capabilities, which can drive future growth. Additionally, its strong advisory and managed services will continue to support customer retention and satisfaction.
SWOT Analysis
This SWOT analysis aims to provide a comprehensive overview of CDW Corporation’s current strategic position.
Strengths
- Strong market position
- Diverse product offerings
- Established customer base
Weaknesses
- Dependence on specific markets
- High competition
- Limited global presence
Opportunities
- Growth in cloud services
- Expansion into emerging markets
- Increased IT spending in government and healthcare
Threats
- Economic downturns
- Rapid technological changes
- Cybersecurity threats
The overall SWOT assessment indicates that CDW Corporation is well-positioned to leverage its strengths and capitalize on emerging opportunities, although it must address its weaknesses and remain vigilant against potential threats. This balanced approach will be crucial for sustaining growth and profitability in a competitive landscape.
Stock Analysis
Over the past year, CDW Corporation’s stock has experienced significant price movements, reflecting key trading dynamics that warrant investor attention.
Trend Analysis
Analyzing CDW’s stock performance over the past year, we observe a percentage change of -35.98%. This indicates a bearish trend, characterized by deceleration. The stock reached a notable high of 255.78 and a low of 142.45. The standard deviation of 31.65 suggests a high level of volatility, which could impact future trading behavior.
Volume Analysis
In the last three months, trading volumes have averaged around 7.26M shares, with a buyer-driven activity leaning towards seller dominance, as the average sell volume (3.82M) slightly outpaced the average buy volume (3.44M). This trend suggests a cautious investor sentiment, although the overall volume trend remains bullish with a positive slope of 26.7K. The increasing volume indicates a heightened market participation, which may reflect growing interest despite the bearish price trend.
Analyst Opinions
Recent analyst recommendations for CDW Corporation (CDW) indicate a consensus to “buy” for 2025. Analysts highlight a strong discounted cash flow score of 4 and an impressive return on equity score of 5, suggesting the company is well-positioned for growth. The overall rating of B+ reflects confidence in CDW’s financial health, despite a lower debt-to-equity score. Notable analysts backing this sentiment include those from leading investment firms, emphasizing CDW’s solid fundamentals and potential for robust returns.
Stock Grades
The stock ratings for CDW Corporation indicate a consistent outlook from various reputable grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Equal Weight | 2025-11-05 |
| UBS | Maintain | Buy | 2025-11-05 |
| Evercore ISI Group | Maintain | Outperform | 2025-10-20 |
| Barclays | Maintain | Equal Weight | 2025-08-07 |
| UBS | Maintain | Buy | 2025-08-07 |
| JP Morgan | Maintain | Neutral | 2025-07-17 |
| Citigroup | Maintain | Neutral | 2025-07-11 |
| Citigroup | Maintain | Neutral | 2025-05-08 |
| UBS | Maintain | Buy | 2025-05-08 |
| Barclays | Maintain | Equal Weight | 2025-05-08 |
Overall, the trend in grades for CDW Corporation reflects stability, with multiple firms maintaining their ratings, suggesting a cautious but positive sentiment among analysts. Notably, UBS and Evercore ISI Group continue to show a favorable stance, indicating confidence in the company’s performance.
Target Prices
The consensus target prices for CDW Corporation indicate a promising outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 190 | 148 | 169 |
Overall, analysts expect CDW’s stock to reach a consensus target of 169, reflecting a balanced perspective on its potential performance.
Consumer Opinions
Consumer sentiment about CDW Corporation reflects a mix of satisfaction and concerns, highlighting the company’s strengths and areas for improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer service and support.” | “Pricing can be higher than competitors.” |
| “Wide range of products available.” | “Delivery times are often longer than expected.” |
| “Intuitive website for easy ordering.” | “Occasional issues with product availability.” |
| “Knowledgeable staff who provide great advice.” | “Some products arrived damaged.” |
Overall, consumer feedback reveals that while CDW excels in customer service and product variety, concerns about pricing and delivery times are frequently mentioned.
Risk Analysis
In this section, I will outline the key risks associated with investing in CDW Corporation, providing a clear understanding of their potential impact on your investment decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in the tech market affecting sales | High | High |
| Supply Chain Risk | Disruptions in supply chains due to global events | Medium | High |
| Regulatory Risk | Changes in regulations impacting operations | Medium | Medium |
| Competitive Risk | Increasing competition from other tech firms | High | High |
| Cybersecurity Risk | Threats to data security and client information | High | High |
In my analysis, market risk and competitive risk stand out as the most probable and impactful threats. Recent trends show a rapid evolution in the tech sector, with companies vying for market share, which could significantly influence CDW’s performance.
Should You Buy CDW Corporation?
CDW Corporation has a net profit margin of 5.13%, a return on invested capital (ROIC) of approximately 13.49%, and a weighted average cost of capital (WACC) of 7.35%. The company benefits from a strong position in the IT solutions space, leveraging a vast distribution network and a solid reputation. However, it faces recent risks related to increased competition and a bearish stock trend.
Given the current metrics—net margin > 0, ROIC > WACC, and a long-term trend that is negative—I would recommend waiting for a bullish reversal before considering an investment in CDW. The stock does not appear favorable for long-term investors at this time due to seller dominance in the volume analysis, indicating the need for stronger buyer volumes to suggest a positive shift.
Specific risks include heightened competition and market dependence, which could impact profitability in the long run.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Is CDW Corporation (CDW) stock worth holding before Fed meeting – July 2025 Setups & Technical Confirmation Trade Alerts – newser.com (Nov 16, 2025)
- SG Americas Securities LLC Raises Stake in CDW Corporation $CDW – MarketBeat (Nov 16, 2025)
- Can CDW Corporation (CDW) stock sustain revenue momentum – July 2025 Weekly Recap & Long Hold Capital Preservation Plans – Fundação Cultural do Pará (Nov 14, 2025)
- CDW Corp: Tough To See Upwards Multiple Re-Rating In The Near Term (Rating Downgrade) – Seeking Alpha (Nov 11, 2025)
- (CDW) Risk Channels and Responsive Allocation – news.stocktradersdaily.com (Nov 16, 2025)
For more information about CDW Corporation, please visit the official website: cdw.com
