CDW (NASDAQ:CDW) Shares Gap Down – Here’s What Happened

CDW Corporation (NASDAQ:CDW)’s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $154.00, but opened at $115.45. CDW shares last traded at $132.83, with a volume of 1,799,802 shares trading hands.

CDW News Roundup

Here are the key news stories impacting CDW this week:

• Positive Sentiment: Q2 results exceeded expectations. Revenue increased 10% year over year to $6.57 billion, ahead of the $6.21 billion consensus estimate, while adjusted EPS of $2.91 surpassed expectations of $2.80 and rose from $2.60 a year earlier. CDW Q2 Earnings and Sales Beat
• Positive Sentiment: Demand remained broad-based. Commercial sales grew 9.2%, government sales increased 13.6%, and international sales rose 22.9%, with AI and infrastructure spending supporting growth. Management raised its full-year outlook to mid-single-digit gross-profit growth and adjusted EPS growth at the high end of the high-single-digit range. CDW Q2 Revenue Rises 10 Percent
• Positive Sentiment: Shareholder returns continue. CDW declared a quarterly dividend of $0.630 per share, payable September 10 to shareholders of record on August 25. CDW Declares Quarterly Cash Dividend
• Neutral Sentiment: Chief Financial Officer Albert J. Miralles announced plans to retire, initiating a leadership transition. The change may increase near-term uncertainty, although no immediate operational impact was reported. CDW CFO Retirement and Leadership Transition
• Negative Sentiment: Margins missed expectations. Gross-profit margin fell to 20.1% from 20.8%, gross profit grew only 6.3%, and operating income increased 2.0%—well below the pace of revenue growth. Management indicated that margins could remain below 2025 levels as sales shift toward larger, lower-margin infrastructure projects and suggested gross profit may be roughly flat sequentially in the third quarter. CDW Shares Fall on Margin Miss
• Negative Sentiment: Cash conversion weakened. First-half adjusted free cash flow declined to $278.4 million from $458.9 million a year earlier, reflecting increased inventory and working-capital investment. Investors appear more focused on the durability of earnings quality and profitability than on the headline beat.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on CDW. Citigroup boosted their target price on CDW from $123.00 to $145.00 and gave the stock a “neutral” rating in a research note on Monday, July 13th. JPMorgan Chase & Co. raised CDW from a “neutral” rating to an “overweight” rating and set a $130.00 price objective on the stock in a research report on Wednesday, May 27th. Royal Bank Of Canada upgraded CDW to an “outperform” rating and set a $130.00 price objective for the company in a research note on Wednesday, May 27th. Raymond James Financial set a $150.00 target price on CDW in a research report on Wednesday, May 6th. Finally, Weiss Ratings upgraded CDW from a “sell (d+)” rating to a “hold (c-)” rating in a research note on Thursday, June 11th. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $146.88.

CDW Stock Performance

The company’s 50 day moving average price is $134.75 and its 200-day moving average price is $127.52. The company has a debt-to-equity ratio of 1.81, a quick ratio of 1.06 and a current ratio of 1.16. The company has a market cap of $17.46 billion, a PE ratio of 16.62, a price-to-earnings-growth ratio of 1.96 and a beta of 0.96.

CDW (NASDAQ:CDW) last posted its quarterly earnings results on Wednesday, August 5th. The information technology services provider reported $2.91 EPS for the quarter, topping analysts’ consensus estimates of $2.80 by $0.11. CDW had a net margin of 4.70% and a return on equity of 49.67%. The company had revenue of $6.57 billion for the quarter, compared to analysts’ expectations of $6.21 billion. During the same quarter in the previous year, the firm posted $2.60 EPS. CDW’s revenue was up 10.0% on a year-over-year basis. Equities research analysts anticipate that CDW Corporation will post 10.21 earnings per share for the current fiscal year.

Insider Transactions at CDW

In other news, Director David W. Nelms bought 18,000 shares of the stock in a transaction on Wednesday, May 27th. The shares were purchased at an average cost of $111.43 per share, for a total transaction of $2,005,740.00. Following the completion of the purchase, the director directly owned 51,025 shares in the company, valued at $5,685,715.75. This represents a 54.50% increase in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. 0.82% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On CDW

Several large investors have recently added to or reduced their stakes in CDW. Hollencrest Capital Management lifted its holdings in shares of CDW by 909.1% in the 1st quarter. Hollencrest Capital Management now owns 222 shares of the information technology services provider’s stock worth $27,000 after acquiring an additional 200 shares during the last quarter. Allied Private Wealth LLC bought a new stake in CDW during the 2nd quarter valued at $28,000. Root Financial Partners LLC boosted its position in CDW by 54.7% during the 1st quarter. Root Financial Partners LLC now owns 263 shares of the information technology services provider’s stock valued at $32,000 after buying an additional 93 shares during the period. Covestor Ltd boosted its position in CDW by 53.4% during the 4th quarter. Covestor Ltd now owns 741 shares of the information technology services provider’s stock valued at $101,000 after buying an additional 258 shares during the period. Finally, Brown Brothers Harriman & Co. grew its holdings in CDW by 38.6% in the 4th quarter. Brown Brothers Harriman & Co. now owns 912 shares of the information technology services provider’s stock worth $124,000 after acquiring an additional 254 shares during the last quarter. Institutional investors own 93.15% of the company’s stock.

About CDW

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.