Yahoo Finance CDW Corporation (NASDAQ:CDW) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
CDW Corporation (NASDAQ:CDW) shareholders are probably feeling a little disappointed, since its shares fell 8.7% to US$210 in the week after its latest second-quarter results. It was a credible result overall, with revenues of US$5.4b and statutory earnings per share of US$2.07 both in line with analyst estimates, showing that CDW is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CDW after the latest results.
View our latest analysis for CDW
Taking into account the latest results, the current consensus from CDW's ten analysts is for revenues of US$21.5b in 2024. This would reflect an okay 2.6% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$8.46, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$21.7b and earnings per share (EPS) of US$8.60 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$251. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CDW at US$270 per share, while the most bearish prices it at US$229. This is a very narrow spread of estimates, implying either that CDW is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 5.3% growth on an annualised basis. That is in line with its 5.5% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.2% annually. So although CDW is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CDW going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with CDW , and understanding this should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
