CDW CDW
CDW is an IT solutions provider that resells hardware, software, and IT services to businesses, governments, and educational organizations, acting as an intermediary between major manufacturers and its clients. CDW shows an attractive valuation (P/E 16.28, FCF yield 4.0%) and exceptional return on equity (ROE 44.01%), but its high leverage (Net Debt/EBITDA 3.02) and low operating margin (7.34%) make it vulnerable to rising debt costs in the current rising-rate environment.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
CDW is an IT solutions provider that resells hardware, software, and IT services to businesses, governments, and educational organizations, acting as an intermediary between major manufacturers and its clients. CDW shows an attractive valuation (P/E 16.28, FCF yield 4.0%) and exceptional return on equity (ROE 44.01%), but its high leverage (Net Debt/EBITDA 3.02) and low operating margin (7.34%) make it vulnerable to rising debt costs in the current rising-rate environment.
Score by category
| Category | Score |
|---|---|
| Financial health | 4.0 |
| Quality / Moat | 6.3 |
| Valuation | 7.4 |
| Growth | 6.1 |
| Dividend | 6.2 |
| Momentum | 4.9 |
| Risk & Context | 6.1 |
OVERALL SCORE: 6.1/10
Context and risks
CDW has a Net Debt/EBITDA of 3.02, a high level for an IT services company. With 10-year yields at 5.17% and rising, its debt costs increase and pressure its operating margin (7.34%), which is already low. The $525M Lovelytics acquisition adds additional balance sheet pressure.
News considered in the analysis
- CDW's $525M Lovelytics Buyout: Can Data & AI Services Boost Growth? — Adquisición de 525M USD para expandir servicios de datos e IA; refuerza la oferta de servicios de mayor margen, aunque el impacto en beneficios aún no se ha materializado.
- Why Is CDW (CDW) Up 8.4% Since Last Earnings Report? — La subida post-resultados ya está descontada en el precio; no aporta información nueva para la valoración.
- 3 Large Cap Value Stocks With Steady Cash Flow as Rates Stay Higher — Listículo genérico sin información específica sobre CDW.
- Is CDW Corporation Stock Underperforming the S&P 500? — Comparativa de rendimiento sin información nueva.
- Does Arrow Electronics Still Buy Back Enough Stock To Matter? — Noticia sobre un competidor, sin impacto directo en CDW.
Verdict: Hold; valuation is reasonable and growth is stable, but leverage and margin limit near-term upside potential.
Main risk: The main risk is its high leverage (Net Debt/EBITDA 3.02) in a rising interest rate environment, which could further compress its already tight operating margin of 7.34%.
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