CDW Corp (CDW)

Price—Loading quote

AI: Fair-priced

Price checkThe shares look fairly priced because cash weakness offsets a modest earnings multiple.

At the August 14 close of $139.42, investors paid about 16.7 times trailing earnings of $8.33 per share. Using the supplied statements, trailing free cash flow—cash left after running and investing in the business—was approximately $860 million. Against a roughly $17.5 billion market value, that is only a 4.9% cash yield. The earnings price looks reasonable, but weaker cash generation and $5.46 billion of net debt prevent a clear bargain verdict.

Big pictureSales are rebounding, but lower-margin hardware is limiting profit and cash growth.

CDW is cyclical because customers can postpone technology purchases. Revenue reached $23.75 billion in 2022, fell to $21.38 billion in 2023, and recovered to $22.42 billion in 2025. First-half 2026 sales then rose 9.6%, but gross profit increased 6.2% and net income only 2.8%. Operating cash flow fell to $220 million from $443 million, partly as customer payments and inventory consumed more cash. The rebound is genuine, but its hardware-heavy mix currently produces less profit and cash per sales dollar.

Business strengthReliable earnings and shrinking share count help, although debt leaves less room for mistakes.

Annual net income rose from $789 million in 2020 to $1.07 billion in 2025, while earnings per share increased from $5.45 to $8.08. Buybacks reduced outstanding shares from 141.9 million to 125.3 million by June 2026, more than offsetting employee stock compensation. CDW spent $653 million on buybacks in 2025 and another $545 million during first-half 2026. However, June debt was $5.82 billion versus $362 million of cash, and current assets covered near-term obligations only 1.17 times.

What could change the storyBetter cash conversion could reveal value, while lasting margin erosion would expose overpayment.

The bull case requires management’s mid-single-digit gross-profit growth and high-single-digit adjusted per-share profit growth to produce cash again. Management targets annual adjusted free cash flow equal to 80%–90% of adjusted income; reaching that target while keeping gross margin near or above 20% would strengthen the undervaluation case. The bear case is continued hardware-led growth with little profit leverage. If annual free cash flow remains below roughly $800 million or net debt keeps rising, today’s moderate earnings multiple would be misleading rather than cheap.

$139.42 price considered

AI: News

Margins cloud strong salesSecond-quarter sales beat expectations, but thinner margins and weak cash flow prompted a sharp reassessment.

On August 5, CDW reported quarterly sales of $6.57 billion, up 10.0%, and adjusted earnings of $2.91 per share, above the reported $2.80 consensus. However, gross margin fell from 20.8% to 20.1%, and quarterly operating cash flow was negative $55 million. Reuters reported shares fell 14% before trading opened after the margin miss. They ultimately closed at $140.10, down 9.0%; the results plausibly drove the move, although price timing alone cannot prove complete causation.

Larger buyback authorizationThe board expanded buyback capacity, supporting each remaining share but increasing the need for disciplined pricing.

On May 13, CDW authorized an additional $1 billion for share repurchases, supplementing approximately $484 million left at March 31. The company said it had returned about $8.4 billion through dividends and buybacks since its 2013 public offering. By June 30, CDW had returned $706 million during 2026, and diluted shares were about 4% lower year over year. Repurchases lift each remaining share’s claim on earnings, but using cash or borrowing at excessive prices would weaken that benefit.

First-quarter margin squeezeStrong product demand lifted sales, yet the hardware-heavy mix again failed to produce matching profit growth.

On May 6, first-quarter sales rose 9.2% to $5.68 billion, while gross profit increased 6.0% and adjusted operating income only 1.8%. Gross margin declined from 21.6% to 21.0%, reflecting a less favorable mix, and adjusted earnings of $2.28 per share was around consensus. Benzinga reported that the shares reached a 52-week low and attributed the weakness to mixed results and margin pressure. The later second-quarter margin decline reinforced this concern.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009
Revenue	$22.42B	$21.00B	$21.38B	$23.75B	$20.82B	$18.47B	$18.03B	$16.24B	$14.83B	$13.67B	$12.99B	$12.07B	$10.77B	$10.13B	$9.60B	$8.80B	$7.16B
Gross profit	$4.87B	$4.60B	$4.65B	$4.69B	$3.57B	$3.21B	$3.04B	$2.71B	$2.45B	$2.33B	$2.12B	$1.92B	$1.76B	$1.67B	$1.58B	$1.39B	$1.13B
Operating income	$1.66B	$1.65B	$1.68B	$1.74B	$1.42B	$1.18B	$1.13B	$987.3M	$866.5M	$820.0M	$742.0M	$673.0M	$508.6M	$510.6M	$470.7M	$352.7M	−$31.9M
EBITDAderived	$1.95B	$1.93B	$1.95B	$2.03B	$1.61B	$1.60B	$1.40B	$1.25B	$1.13B	$1.07B	$969.4M	$880.9M	$716.8M	$720.8M	$675.6M	$562.1M	$186.3M
Net income	$1.07B	$1.08B	$1.10B	$1.11B	$988.6M	$788.5M	$736.8M	$643.0M	$523.1M	$425.1M	$403.1M	$244.9M	$132.8M	$119.0M	$17.1M	−$29.2M	−$373.4M
Basic EPSper diluted share	$8.13	$8.06	$8.20	$8.24	$7.14	$5.53	$5.08	$4.26	$3.37	$2.60	$2.37	$1.44	$0.85	$0.82	$0.12	-$0.20	—
Diluted EPSper diluted share	$8.08	$7.97	$8.10	$8.13	$7.04	$5.45	$4.99	$4.19	$3.31	$2.56	$2.35	$1.42	$0.84	$0.82	$0.12	-$0.20	—

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys4$2.99M disclosed value

Sells (SEC code S)9$18.31M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 27, 2026Form 4	NELMS DAVID WDirector	BuyCommon Stock, par value $0.01	18.0K	$111.43	$2.01M	51.0K
May 18, 2026Form 4	LEAHY CHRISTINE ASee Remarks	BuyCommon Stock, par value $0.01	4.8K	$103.40	$499.4K	193.4K
Dec 8, 2025Form 4	Chawla SonaSee Remarks	SellCommon Stock, par value $0.01	7.4K	$146.17	$1.08M	28.1K
May 13, 2025Form 4	KULEVICH FREDERICK J.See Remarks	SellCommon Stock, par value $0.01	12.0K	$191.28	$2.29M	36.1K
May 13, 2025Form 4	KULEVICH FREDERICK J.See Remarks	SellCommon Stock, par value $0.01	16.2K	$190.62	$3.08M	48.1K

Review ownership filings at SEC.gov ↗

CDW Corp (CDW)

Financial charts

Financial statements

Insider buys & sells