In a world increasingly reliant on technology, CDW Corporation transforms how businesses operate by delivering seamless IT solutions that enhance efficiency and connectivity. This industry leader specializes in a range of services from cloud capabilities to cybersecurity, catering to a diverse clientele including government and healthcare sectors. With a reputation for innovation and quality, CDW is at the forefront of the Information Technology Services industry. As we dive into the investment analysis, I invite you to consider whether CDW’s robust fundamentals still align with its current market valuation and growth prospects.
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 across three segments: Corporate, Small Business, and Public, providing a wide range of IT solutions, including hardware, software, and integrated services. Its offerings encompass notebooks, desktop computers, security software, and cloud capabilities, catering to diverse customers in government, education, and healthcare sectors. With a market cap of approximately $19B, CDW has established itself as a leader in the IT solutions market in the U.S., U.K., and Canada. By focusing on innovation and comprehensive service delivery, CDW plays a pivotal role in shaping the future of IT infrastructure and 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 presents the Income Statement for CDW Corporation over the past five fiscal years, highlighting key financial metrics and performance indicators.
| 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 |
Interpretation of Income Statement
Over the past five years, CDW Corporation’s revenue showed a slight decline from 23.75B in 2022 to 20.99B in 2024, while net income also followed a downward trend, dropping from 1.11B to 1.08B. Gross profit margins have remained relatively stable, indicating effective cost management. In the most recent year, the company’s performance demonstrated resilience despite the revenue decrease, with a slight improvement in EBITDA, suggesting operational efficiency. However, the decline in net income points to the need for strategic adjustments to enhance growth and shareholder value.
Financial Ratios
Here is a summary of the key financial ratios for CDW Corporation over the years.
| Metrics | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 4.27% | 4.75% | 4.69% | 5.17% | 5.13% |
| ROE | 60.79% | 140.09% | 69.51% | 54.07% | 45.81% |
| ROIC | 15.49% | 12.69% | 15.77% | 15.14% | 13.13% |
| 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
Analyzing CDW Corporation’s financial ratios for FY 2024 reveals a mixed picture of financial health. The liquidity ratios, such as the current ratio at 1.35 and quick ratio at 1.24, indicate adequate short-term financial stability. However, the solvency ratio at 0.11 and a high debt-to-equity ratio of 2.55 raise concerns about long-term financial leverage. Profitability ratios, including a net profit margin of 5.13%, suggest moderate profitability, but the price-to-earnings ratio of 21.61 indicates that the stock may be overvalued. Efficiency metrics like inventory turnover (27.09) and asset turnover (1.43) are strong, indicating effective management of resources. I advise caution due to the high leverage and potential valuation concerns.
Evolution of Financial Ratios
Over the past five years, CDW’s financial ratios have shown a trend of increasing profitability and efficiency, with a notable improvement in the gross profit margin from 17.14% in 2021 to 21.92% in 2024. However, the increasing debt-to-equity ratio signals escalating financial risk, warranting careful monitoring.
Distribution Policy
CDW Corporation pays a dividend with a payout ratio of approximately 30.8%, reflecting a balanced approach to returning capital to shareholders. The annual dividend yield stands at 1.43%, with a consistent trend in dividend per share over recent years. Additionally, CDW engages in share buyback programs, which can enhance shareholder value but may pose risks if excessive. Overall, this distribution strategy supports sustainable long-term value creation for shareholders, provided it remains manageable within cash flow constraints.
Sector Analysis
CDW Corporation operates in the Information Technology Services sector, providing a range of IT solutions across hardware, software, and integrated systems, catering to diverse customer segments.
Strategic Positioning
CDW Corporation holds a significant position in the Information Technology Services sector, with a market capitalization of approximately $19B. The company’s diverse portfolio spans corporate, small business, and public sectors, enabling it to capture a sizable market share in IT solutions. However, competitive pressure from emerging tech firms and established players is palpable, especially as cloud computing and hybrid solutions gain traction. Technological disruption continues to reshape the landscape, necessitating ongoing innovation and adaptation to maintain its competitive edge. As an investor, I recognize the importance of closely monitoring these dynamics to mitigate risks in my portfolio.
Revenue by Segment
The following chart illustrates CDW Corporation’s revenue distribution by segment for the fiscal year 2024, highlighting key areas of growth and performance trends.
In fiscal year 2024, CDW’s total revenue was significantly driven by the Software Products segment, contributing 3.8B, followed by Services at 1.87B and Total Hardware at 15.22B. Compared to 2023, Software Products saw slight growth, while Total Hardware revenue declined, indicating a shift in demand dynamics. Notably, the Services segment displayed robust growth, suggesting a strategic pivot toward higher-margin offerings. This trend could signify potential concentration risks if reliance on specific segments continues to increase, necessitating careful monitoring of market conditions and competitive pressures.
Key Products
CDW Corporation offers a comprehensive range of information technology solutions tailored to meet the diverse needs of its customers. Below is a table highlighting some of the key products offered by CDW:
| Product | Description |
|---|---|
| Notebooks/Mobile Devices | Portable computing solutions that cater to both business and personal use, enhancing mobility. |
| Network Communications | Hardware solutions that facilitate seamless connectivity and communication across various platforms. |
| Desktop Computers | High-performance systems designed for office environments and demanding applications. |
| Video Monitors | Display solutions that provide high-resolution visuals for various applications, including business and entertainment. |
| Enterprise Data Storage | Scalable storage solutions that enable businesses to efficiently manage and protect their data. |
| Application Suites | Comprehensive software packages that address various business needs, including productivity and management. |
| Security Software | Solutions designed to protect networks and data from cyber threats, ensuring robust security measures. |
| Virtualization Solutions | Technologies that allow multiple virtual environments to run on a single physical server, optimizing hardware usage. |
| Cloud Capabilities | Integrated solutions providing on-demand resources and services over the internet, enhancing flexibility and scalability. |
| Managed Services | Professional services that help businesses optimize their IT operations through ongoing management and support. |
This diverse product lineup positions CDW Corporation as a leading player in the information technology services sector, catering to a broad range of customers from government to healthcare.
Main Competitors
The competitive landscape for CDW Corporation is characterized by several significant players in the Information Technology Services sector. Below is a table of the main competitors, including CDW itself, sorted by market capitalization:
| Company | Market Cap |
|---|---|
| Wipro Limited | 29.83B |
| Leidos Holdings, Inc. | 23.89B |
| ON Semiconductor Corporation | 22.39B |
| Corpay, Inc. | 21.83B |
| SS&C Technologies Holdings, Inc. | 21.56B |
| Check Point Software Technologies Ltd. | 20.79B |
| CGI Inc. | 20.55B |
| United Microelectronics Corporation | 20.00B |
| GoDaddy Inc. | 17.93B |
| Gartner, Inc. | 17.63B |
| CDW Corporation | 19.04B |
The main competitors in the IT services market exhibit strong market capitalizations, indicating their significant presence in the sector. This landscape primarily covers the North American market, where these companies provide various technology solutions and services.
Competitive Advantages
CDW Corporation benefits from a strong market position in the Information Technology Services sector, bolstered by its diverse product offerings across hardware, software, and integrated IT solutions. The company’s three operational segments—Corporate, Small Business, and Public—allow it to cater to a broad customer base, enhancing resilience against market fluctuations. Looking ahead, CDW is well-positioned to capitalize on emerging opportunities in cloud computing and cybersecurity, with plans to expand into new markets and develop innovative products that address evolving customer needs. This strategic focus on growth will likely enhance its competitive edge.
SWOT Analysis
This SWOT analysis provides a comprehensive overview of CDW Corporation’s strategic position in the market.
Strengths
- Strong market presence
- Diverse service offerings
- Established customer base
Weaknesses
- Dependence on third-party suppliers
- Vulnerability to economic downturns
- Limited global reach
Opportunities
- Growth in cloud services
- Increasing demand for cybersecurity
- Expansion into emerging markets
Threats
- Intense competition
- Rapid technological changes
- Regulatory challenges
Overall, CDW Corporation exhibits a robust position with several strengths and opportunities that can be leveraged for growth. However, awareness of weaknesses and potential threats is essential for developing a resilient strategy moving forward.
Stock Analysis
CDW Corporation has experienced significant price movements over the past year, culminating in a bearish trend characterized by a notable decline in stock value.
Trend Analysis
Over the past year, CDW’s stock price has decreased by approximately 33.26%. This substantial decline clearly indicates a bearish trend. The stock has seen notable highs of 255.78 and lows of 140.2, reflecting a volatile environment, with a standard deviation of 32.63. Moreover, the recent trend from September 21, 2025, to December 7, 2025, shows a further decline of 9.29%, with a standard deviation of 8.17, suggesting a deceleration in the downward momentum.
Volume Analysis
Analyzing the trading volumes over the last three months, the total volume reached 622.4M, with buyer activity at 324.0M and seller activity at 296.3M, resulting in a buyer percentage of 52.06. The volume trend is increasing, indicating a slightly buyer-dominant sentiment with a buyer dominance percentage of 54.37 in the recent period. This suggests that despite the bearish price action, there remains some interest from buyers in the market.
Analyst Opinions
Recent recommendations for CDW Corporation (CDW) indicate a consensus “Buy” rating. Analysts highlight the company’s strong return on equity (5) and solid discounted cash flow score (4) as key strengths. Notably, the overall score of 3 reflects a balanced outlook amidst a competitive market. Analysts emphasize the importance of CDW’s manageable debt-to-equity ratio (1) as a positive indicator for stability. As of 2025, I align with the consensus view, suggesting that CDW remains a compelling investment for those looking to enhance their portfolios.
Stock Grades
CDW Corporation has received various stock ratings from reputable grading companies, indicating a mixed but generally positive outlook.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Raymond James | upgrade | Strong Buy | 2025-11-25 |
| Barclays | maintain | Equal Weight | 2025-11-05 |
| UBS | maintain | Buy | 2025-11-05 |
| Evercore ISI Group | maintain | Outperform | 2025-10-20 |
| UBS | maintain | Buy | 2025-08-07 |
| Barclays | maintain | Equal Weight | 2025-08-07 |
| JP Morgan | maintain | Neutral | 2025-07-17 |
| Citigroup | maintain | Neutral | 2025-07-11 |
| UBS | maintain | Buy | 2025-05-08 |
| Barclays | maintain | Equal Weight | 2025-05-08 |
The overall trend shows a recent upgrade to “Strong Buy” from Raymond James, suggesting growing confidence in CDW’s performance. However, several firms have maintained their ratings, indicating a more cautious sentiment among some analysts.
Target Prices
The consensus target prices for CDW Corporation indicate a favorable outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 190 | 148 | 174.33 |
Overall, analysts expect CDW’s stock to reach a consensus of approximately 174.33, reflecting a positive market sentiment.
Consumer Opinions
Consumer sentiment towards CDW Corporation reflects a blend of satisfaction and areas for improvement, showcasing how customers perceive their products and services.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer service and support!” | “Pricing can be on the higher side.” |
| “Wide range of products available.” | “Delivery times are sometimes delayed.” |
| “User-friendly website for orders.” | “Some products lack comprehensive details.” |
Overall, consumer feedback on CDW Corporation highlights strong customer service and product variety as significant strengths, while pricing and delivery issues frequently emerge as concerns.
Risk Analysis
In assessing the potential risks associated with investing in CDW Corporation, I have compiled a table summarizing key risk factors:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in market demand for IT solutions | High | High |
| Regulatory Risk | Changes in government regulations affecting IT | Medium | High |
| Cybersecurity Risk | Increasing threats of data breaches and attacks | High | High |
| Competition Risk | Rising competition from other IT service providers | Medium | Medium |
| Economic Risk | Economic downturns impacting IT spending | Medium | High |
In summary, the most significant risks for CDW Corporation include market volatility and cybersecurity threats, both of which can profoundly affect performance. As of 2025, the landscape remains challenging, with an increasing emphasis on robust cybersecurity measures amid heightened competition.
Should You Buy CDW Corporation?
CDW Corporation shows a net income of 1.078B and a positive net profit margin of 5.13%, indicating profitability. The company has a return on invested capital (ROIC) of 13.13%, which exceeds its weighted average cost of capital (WACC) of 7.34%, suggesting value creation. However, with a total debt of 5.9919B and a debt-to-equity ratio of 0.303, the leverage is notable. The overall rating is B+, which indicates a solid but cautious outlook for potential investors.
Favorable signals
In my analysis of CDW Corporation, I found several favorable elements. The company shows a strong return on equity (ROE) of 45.81%, indicating effective use of shareholder equity. Additionally, both the return on invested capital (ROIC) at 13.13% and the weighted average cost of capital (WACC) at 7.34% suggest value creation for investors. The interest coverage ratio of 7.69 also demonstrates a solid ability to meet interest obligations, while a quick ratio of 1.24 indicates good short-term liquidity.
Unfavorable signals
However, there are notable unfavorable elements to consider. The revenue growth is negative at -1.77%, alongside a gross profit growth of -1.07%. The net margin growth is also unfavorable at -0.65%, which may indicate challenges in maintaining profitability. The debt-to-equity ratio of 2.55 presents a high level of leverage, suggesting potential financial risk. Moreover, the price-to-book (PB) ratio of 9.9 is unfavorable, indicating that the stock may be overvalued.
Conclusion
Considering the mixed signals, with favorable ratios pointing to strong financial performance but unfavorable income statement indicators and a bearish overall trend, it might be prudent to wait for buyers to return before making any investment decisions regarding CDW Corporation.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Why Is CDW (CDW) Down 1.8% Since Last Earnings Report? – Nasdaq (Dec 04, 2025)
- Crescent Grove Advisors LLC Purchases 18,009 Shares of CDW Corporation $CDW – MarketBeat (Dec 04, 2025)
- Mission and CDW Bring Integrated Cloud Solutions to AWS Marketplace – ChannelE2E (Dec 04, 2025)
- Mission & CDW Announce Multi-Product Solutions in AWS Marketplace as Launch Partners – PR Newswire (Dec 03, 2025)
- CDW (CDW) Secures AWS Agentic AI Specialization: A Fresh Look at Whether the Stock’s Valuation Reflects Its AI Progress – Sahm (Dec 03, 2025)
For more information about CDW Corporation, please visit the official website: cdw.com
