PC Connection, Inc. (CNXN)
NASDAQInformation TechnologyTechnology DistributorsSnapshot 2026-09-04
$84.35+0.98%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologyTechnology DistributorsSnapshot 2026-09-04
Intact: The reason to own it still holds.
PC Connection grows sales about 3% yearly, with revenue rising from $701M to $722M in one year. Profit improved, with operating income up from $14.5M to $20.2M. The company raised dividends and announced a $50M buyback, showing financial strength. Analysts expect steady earnings near $3.92 per share in 2026.
Revenue growth is slow and management admits being behind on growth goals. Profit gains are modest and recent guidance was cut. The company faces operational challenges and earnings revisions have trended down. Competition and market pressures could limit future gains.
The stock trades about 18% below our fair value near $93. The market expects about 5% revenue growth, slightly above recent 3% growth. Our view aligns with moderate growth but sees risk from recent guidance cuts.
Breaks if: EPS guidance falls below $0.68 for Q4 2026
Breaks if: Gross profit falls below $132M next year
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
CNXN represents a stable investment with a focus on growth and profitability. The current thesis is intact, supported by strong recent financial results and management's commitment to key priorities.
The market currently prices CNXN as cheap compared to its peers, reflecting a low expectations gap. However, there is a fragility in earnings quality that could impact future performance.
Management is on track with priorities to increase revenue growth and improve profitability, as evidenced by recent financial results. There is a low probability of missing earnings expectations, but past performance shows a risk of deeper misses.
The long-term thesis hinges on management's ability to maintain growth and profitability. Key factors include potential changes in Federal Reserve interest rates and performance of sector bellwethers that could influence market sentiment.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the thesis of strong performance. However, concerns about leadership stability arose after the CEO sold shares worth $4.3 million.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Focus on strategies to enhance gross profit margins.
Breaks if: Operating income falls below $20M next year
Enhance operating income through cost management and efficiency.
Breaks if: YoY revenue growth falls below 3% next year
Focus on growing net sales and gross billings across all segments, driven by demand for IT solutions and AI operationalization.
Stated as a priority in 4 of last 4 quarters. Net sales grew from $701.0M in 2026-Q1 to $854.0M in 2026-Q2, up 12.4% y/y in Q2. Gross billings rose 14.0% y/y to $1.2B in Q2 2026. Despite a slight decline in 2025-Q4, the recent quarters show delivering growth consistent with management's stated focus.
“Net sales for the quarter ended June 30, 2026 increased by 12.4%, year over year.”
“Net sales for the quarter ended March 31, 2026 increased by 3.0%, year over year.”
“Net sales for the quarter ended December 31, 2025 decreased by 0.8%, year over year.”
“Net sales were $709.1 million in 2025-Q3, showing stable revenue.”
Overall, CNXN's fundamentals are strong, but the investment thesis is sensitive to external economic factors and management execution. Not investment advice.