DB:PCC

Stock Analysis Report

PC Connection

Executive Summary

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions.

Rewards

Trading at 56.1% below its fair value

Earnings are forecast to grow 6.52% per year

Earnings grew by 27.1% over the past year

Risk Analysis

No risks detected for PCC from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has PC Connection's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PCC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

PCC

-1.9%

DE Electronic

-0.9%

DE Market


1 Year Return

11.8%

PCC

8.5%

DE Electronic

12.8%

DE Market

Return vs Industry: PCC exceeded the German Electronic industry which returned 8.5% over the past year.

Return vs Market: PCC underperformed the German Market which returned 12.8% over the past year.


Shareholder returns

PCCIndustryMarket
7 Day2.0%-1.9%-0.9%
30 Day-14.7%8.2%-0.4%
90 Day-6.5%8.8%2.3%
1 Year12.5%11.8%10.9%8.5%16.3%12.8%
3 Year64.7%59.8%49.7%44.8%15.8%5.7%
5 Year93.3%81.9%114.5%99.2%19.7%3.3%

Price Volatility Vs. Market

How volatile is PC Connection's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is PC Connection undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PCC (€40.6) is trading below our estimate of fair value (€92.57)

Significantly Below Fair Value: PCC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PCC is good value based on its PE Ratio (14.1x) compared to the Electronic industry average (29.8x).

PE vs Market: PCC is good value based on its PE Ratio (14.1x) compared to the German market (21x).


Price to Earnings Growth Ratio

PEG Ratio: PCC is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: PCC is overvalued based on its PB Ratio (1.9x) compared to the DE Electronic industry average (1.9x).


Next Steps

Future Growth

How is PC Connection forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PCC's forecast earnings growth (6.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: PCC's earnings (6.5% per year) are forecast to grow slower than the German market (13% per year).

High Growth Earnings: PCC's earnings are forecast to grow, but not significantly.

Revenue vs Market: PCC's revenue (4.1% per year) is forecast to grow slower than the German market (5.2% per year).

High Growth Revenue: PCC's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PCC's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has PC Connection performed over the past 5 years?

13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PCC has high quality earnings.

Growing Profit Margin: PCC's current net profit margins (2.9%) are higher than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: PCC's earnings have grown by 13% per year over the past 5 years.

Accelerating Growth: PCC's earnings growth over the past year (27.1%) exceeds its 5-year average (13% per year).

Earnings vs Industry: PCC earnings growth over the past year (27.1%) exceeded the Electronic industry -3.9%.


Return on Equity

High ROE: PCC's Return on Equity (13.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is PC Connection's financial position?


Financial Position Analysis

Short Term Liabilities: PCC's short term assets ($776.4M) exceed its short term liabilities ($308.9M).

Long Term Liabilities: PCC's short term assets ($776.4M) exceed its long term liabilities ($31.1M).


Debt to Equity History and Analysis

Debt Level: PCC is debt free.

Reducing Debt: PCC had no debt 5 years ago.

Debt Coverage: PCC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: PCC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: PCC has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if PCC's debt is covered by short term assets.


Next Steps

Dividend

What is PC Connection's current dividend yield, its reliability and sustainability?

0.73%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: PCC's dividend (0.73%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: PCC's dividend (0.73%) is low compared to the top 25% of dividend payers in the German market (3.63%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PCC has been paying a dividend for less than 10 years.

Growing Dividend: PCC has only been paying a dividend for 7 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

18.0yrs

Average board tenure


CEO

Tim McGrath (60yo)

8.5yrs

Tenure

US$4,494,125

Compensation

Mr. Timothy J. McGrath, also known as Tim, has been the Chief Executive Officer of PC Connection, Inc. since August 2011 and has been its President since May 2010. Mr. McGrath served as the President and C ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD4.49M) is above average for companies of similar size in the German market ($USD1.20M).

Compensation vs Earnings: Tim's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Patricia Gallup
Co-Founder25.4yrsUS$816.38k1.81% $19.3m
David Hall
Co-Founder & Director0yrsUS$305.00k0.094% $1.0m
David Beffa-Negrini
Independent Director25.4yrsUS$205.00k0.38% $4.0m
Barbara Duckett
Independent Director10.7yrsUS$225.00k0.056% $601.7k
Jack Ferguson
Independent Director3.8yrsUS$230.00k0.32% $3.4m

18.0yrs

Average Tenure

70yo

Average Age

Experienced Board: PCC's board of directors are seasoned and experienced ( 18 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PCC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

PC Connection, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: PC Connection, Inc.
  • Ticker: PCC
  • Exchange: DB
  • Founded: 1982
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: US$1.157b
  • Listing Market Cap: US$1.065b
  • Shares outstanding: 26.34m
  • Website: https://www.connection.com

Number of Employees


Location

  • PC Connection, Inc.
  • 730 Milford Road
  • Merrimack
  • New Hampshire
  • 03054-4631
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CNXNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1998
PCCDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1998

Biography

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions segments. It offers IT products, including computer systems, software and peripheral equipment, networking communications, and other products and accessories. The company also provides services, such as design, configuration, and implementation of IT solutions. In addition, it publishes Connected, a quarterly publication that provides informative articles on the latest technologies and industry trends; distributes specialty catalogs to education, healthcare, and government customers; and MacConnection that publishes a catalog for the Apple market. The company markets its products and services through its Websites comprising connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) that include small office/home office customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales, and marketing programs targeted to specific customer populations, as well as through digital, Web, and print media advertising. The company was founded in 1982 and is headquartered in Merrimack, New Hampshire. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 21:38
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.