CDW (NASDAQ:CDW) Announces Earnings Results

CDW (NASDAQ:CDW) announced its earnings results on Wednesday. The information technology services provider reported $2.28 EPS for the quarter, hitting the consensus estimate of $2.28, FiscalAI reports. CDW had a return on equity of 50.66% and a net margin of 4.76%.The company had revenue of $5.68 billion for the quarter, compared to analysts’ expectations of $5.48 billion. During the same quarter in the prior year, the business earned $2.15 earnings per share. The business’s revenue for the quarter was up 9.2% on a year-over-year basis.

Here are the key takeaways from CDW’s conference call:

• Q1 financials — Consolidated net sales rose 9%, gross profit grew 6%, non?GAAP EPS increased 6%, and adjusted free cash flow was $251M, delivering a record first?quarter gross profit.
• Demand shifted toward AI and infrastructure with hardware up 10% and networking/servers/storage each >20%, while services and netted?down revenues were deprioritized, which pressured gross margin by roughly 60 basis points due to mix.
• The new Geared for Growth AI?powered modernization program is being embedded across operations and sales (e.g., CDW Assist Super Agent), with expected benefits starting in H2 and a targeted $100M–$200M annual run?rate improvement by 2027–2028.
• Supply and timing dynamics created an elevated backlog entering Q2 from pull?ins and shipment delays, supporting a stronger near?term outlook while management remains cautious about potential H2 uncertainty.
• Capital allocation remained shareholder?friendly — $282M returned in Q1 ($201M buybacks, $81M dividends), net leverage at ~2.5x, a target ~25% dividend payout ratio, and opportunistic M&A/share repurchases going forward.

CDW Trading Down 20.3%

Shares of NASDAQ:CDW traded down $27.73 during midday trading on Wednesday, hitting $109.07. The company had a trading volume of 5,253,068 shares, compared to its average volume of 1,706,996. The company has a current ratio of 1.18, a quick ratio of 1.10 and a debt-to-equity ratio of 1.77. CDW has a 12 month low of $106.00 and a 12 month high of $192.30. The firm has a fifty day simple moving average of $125.61 and a 200 day simple moving average of $134.85. The stock has a market cap of $13.96 billion, a price-to-earnings ratio of 13.48, a PEG ratio of 1.86 and a beta of 1.04.

Key Stories Impacting CDW

Here are the key news stories impacting CDW this week:

• Positive Sentiment: Q1 revenue beat and demand tailwinds: CDW reported net sales of ~$5.68B, up 9.2% year-over-year, driven by strong demand for AI, cloud and infrastructure solutions — revenue topped Street estimates. Revenue Beat
• Positive Sentiment: Dividend declared: the board announced a quarterly cash dividend of $0.63 per share (payable June 10), underscoring management’s capital-allocation priorities (dividends, buybacks, M&A). Dividend Announcement
• Positive Sentiment: Strategic talent hire: CDW’s recruitment of HPE’s Hang Tan highlights a push into enterprise services and managed solutions that could expand higher-margin service offerings over time. Hiring Analysis
• Neutral Sentiment: EPS roughly in line: reported EPS was $2.28 — in line with some consensus estimates but marginally below others (small model variance). Management emphasized continued AI-driven spending in the call. Earnings Transcript
• Neutral Sentiment: Analyst and institutional context: Street price targets still show upside (median ~ $155) but Q4–Q1 institutional rebalancing has been active — some large funds reduced positions while others added. This mix can amplify volatility. Analyst & Institutional Data
• Negative Sentiment: Sharp intraday selling and volume spike: CDW shares moved sharply lower on heavy volume (well above average), with intraday selling cited in market-data reports as the proximate cause of the drop. That forced a rerating despite fundamentally solid top-line prints. Intraday Trading Data
• Negative Sentiment: Margin pressure / profitability metrics: gross and operating margins were slightly compressed year-over-year (non-GAAP operating margin down modestly), and net margin remains relatively thin — a potential concern if cost or pricing pressure persists. Earnings Release

Wall Street Analyst Weigh In

Several equities research analysts have weighed in on the stock. JPMorgan Chase & Co. lowered their price objective on shares of CDW from $170.00 to $160.00 and set a “neutral” rating for the company in a research report on Thursday, February 5th. UBS Group decreased their price target on shares of CDW from $190.00 to $162.00 and set a “buy” rating on the stock in a research note on Thursday, February 5th. Morgan Stanley boosted their price objective on shares of CDW from $141.00 to $142.00 and gave the stock an “equal weight” rating in a research report on Thursday, February 5th. Raymond James Financial set a $150.00 price objective on CDW in a research report on Wednesday. Finally, Citigroup lifted their target price on CDW from $148.00 to $150.00 and gave the company a “neutral” rating in a research note on Thursday, February 5th. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating and five have issued a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $155.43.

Institutional Trading of CDW

A number of hedge funds have recently modified their holdings of the company. Align Financial LLC acquired a new position in shares of CDW in the 4th quarter valued at $1,929,000. California State Teachers Retirement System grew its position in shares of CDW by 2.3% in the 4th quarter. California State Teachers Retirement System now owns 230,692 shares of the information technology services provider’s stock valued at $31,420,000 after purchasing an additional 5,121 shares during the period. Van ECK Associates Corp increased its stake in CDW by 9.8% during the 4th quarter. Van ECK Associates Corp now owns 27,910 shares of the information technology services provider’s stock worth $3,801,000 after purchasing an additional 2,498 shares in the last quarter. Campbell & CO Investment Adviser LLC bought a new position in CDW in the fourth quarter valued at approximately $351,000. Finally, Brown Brothers Harriman & Co. boosted its holdings in shares of CDW by 38.6% in the fourth quarter. Brown Brothers Harriman & Co. now owns 912 shares of the information technology services provider’s stock valued at $124,000 after buying an additional 254 shares during the period. 93.15% of the stock is currently owned by institutional investors and hedge funds.

CDW Company Profile

CDW (NASDAQ: CDW) is a leading provider of information technology products and integrated solutions for business, government, education and healthcare customers. The company sources and resells hardware and software from major technology vendors and packages those products with professional services, managed services and lifecycle support. Its offerings span IT infrastructure, cloud and data center solutions, cybersecurity, networking, unified communications, endpoint devices, and software licensing and procurement services designed to simplify IT operations for customers.

CDW combines a broad product portfolio with consultative sales, implementation and technical support capabilities.