CDW
CDW Corporation$124.77
Unclear
Target $130.46
Report: Mar 07, 2026Technology • Information Technology Services • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$124.77+4.6%
Rec: UnclearConviction: Medium
Entry Target
$100.35
(20% below current)
Fair Value
$130.46
(5% above current)
Stop Loss
$118.44
(5% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$192.30
52 Week Low$112.98
Avg. 3 Month Volume1.71M
Efficiency
LTM Gross Margin21.7%
LTM EBITDA Margin8.7%
LTM EBIT Margin7.4%
LTM Operating Margin7.4%
LTM ROA6.9%
LTM ROE42.9%
LTM ROIC19.0%
LTM ROCE17.9%
Capital Structure
Market Cap (MM)$15.6B
Enterprise Value (MM)$20.8B
Shares Outstanding130.10M
Total Debt (MM)$5.79B
Cash & Equivalents (MM)$618.70M
LTM Net Debt (MM)$5.17B
LTM Net Debt/EBITDA2.7x
Growth
TTM Rev. Growth6.8%
Last 3-Yr Rev. CAGR-1.9%
Last 3-Yr EBITDA CAGR-1.1%
Last 3-Yr EPS CAGR-0.4%
Valuation
Street Target Price$162.40
LTM EV/Revenue0.9x
LTM EV/Gross Profit4.3x
LTM EV/EBIT12.6x
LTM EV/EBITDA10.7x
LTM P/E14.6x
LTM EV/FCF19.1x
LTM P/FCF14.3x
LTM P/TB1.5x
LTM P/B6.0x
Dividend Yield2.1%
Payout Ratio30.8%
Executive SummarySituation: Current price is $124.77 versus fair value $130.46 (4.6% expected return), and valuation confidence is stable. Debate: Bull case depends on AI Services Revenue Breakout: Confirmation that AI-enabled services are contributing significantly to gross profit growth. Bear case centers on Moat Erosion via OEM Direct Sales: Major partners like Dell or HP bypass the VAR channel to sell directly to enterprise and public sector clients. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
1. AI-driven services breakout: Services and software now represent 36.1% of gross profit, providing a path to margin expansion. 2. Superior capital efficiency: ROIC of 19.0% and a 100% FCF-positive history demonstrate a high-quality compounding engine. 3. Aggressive capital return: A 5.9% net yield through dividends and buybacks provides a strong floor for shareholder returns.
Bear Case
1. Moat erosion: Direct OEM sales and low-cost competitors are pressuring pricing power, evidenced by a 20bps gross margin slip. 2. Value-destructive reinvestment: Negative incremental ROIC of -1.3% and low M&A effectiveness (0.1x) suggest recent capital deployment is not creating value. 3. Technical staff 'hollowing out': Reports of shrinking Network Operations Center staff could compromise long-term service quality.
Key Catalysts
Mid-Term (6-18 months)Impact: High
AI Services Revenue Breakout: Confirmation that AI-enabled services are contributing significantly to gross profit growth. This addresses ma...
Near-Term (0-6 months)Impact: High
Margin Stabilization: Two consecutive quarters of flat or expanding operating margins. This would invalidate the bear thesis of permanent ma...
Long-Term (18+ months)Impact: Moderate
CDW is at a critical juncture where its successful revenue expansion (+6.8%) is being overshadowed by margin compression, making the next tw...
Primary Risks
Concern: High
Moat Erosion via OEM Direct Sales: Major partners like Dell or HP bypass the VAR channel to sell directly to enterprise and public sector cl...
Concern: Medium
Technical Talent Attrition: The reported 'hollowing out' of technical staff (NOC staff down from 30 to 11) impairs the company's ability to...
Concern: Medium
Stewardship is professional but lacks 'skin in the game,' as evidenced by the low 0.1% insider ownership. The board is strong, featuring fin...
Recent Activity
2026-02-04SEC Filing (8-K)
+9.45%CDW Corporation reported fourth quarter and full year 2025 earnings with 6.3% and 6.8% revenue growth respectively.
2025-11-04SEC Filing (8-K)
-8.51%CDW reported Q3 2025 earnings with 4.0% increase in net sales to $5.74B and gross profit margin of 21.9%.
2025-05-07SEC Filing (8-K)
+7.07%CDW reports Q1 2025 earnings with revenue growth and margin expansion.
2025-04-09Market Movement
+9.21%Market/Sector Move +9.21%
2024-10-30SEC Filing (8-K)
-11.30%CDW reported Q3 2024 earnings with 2.0% decline in net sales to $5.52B, but maintained gross profit margin at 21.8%.
Valuation Table
9.8/10Decision Grade
Scenario Range
$109
Bear
$156
Base
$193
Bull
$125