Assessing CDW (CDW) Valuation After A Steep Share Price Pullback

CDW (CDW) has drawn attention after recent trading, with the share price at $126 and returns over the past year and past 3 months both in negative territory. Investors may be reassessing expectations.

See our latest analysis for CDW.

The recent 1 month share price return of a 9.16% decline and 3 month share price return of a 20.33% decline sit alongside a 1 year total shareholder return of a 34.45% decline, which points to fading momentum as investors reassess CDW's risk and growth profile.

If CDW's pullback has you reassessing your watchlist, it could be a good moment to widen the lens and look at high growth tech and AI stocks that might fit your next idea.

With CDW trading at $126 after a 34.45% 1 year total return decline, yet sitting at a discount to some valuation estimates, you have to ask: is this a reset that offers upside, or is the market already pricing in future growth?

Most Popular Narrative: 30.2% Undervalued

CDW's most followed narrative puts fair value at $180.60 versus the recent $126 share price, framing the current pullback as a sizable discount.

The analysts are assuming CDW's revenue will grow by 3.5% annually over the next 3 years.

Analysts assume that profit margins will increase from 4.9% today to 5.5% in 3 years time.

Read the complete narrative.

Want to see what turns modest top line growth and a margin lift into that higher fair value number? The narrative ties steady earnings, richer profitability and a future valuation multiple usually reserved for higher growth names into one cohesive forecast. Curious which assumptions matter most and how they stack up against CDW's recent results? Read on and test whether this narrative lines up with your own expectations.

Result: Fair Value of $180.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer recent revenue versus expectations and an uncertain spending backdrop could pressure those margin and earnings assumptions that underpin the 30.2% undervaluation story.

Find out about the key risks to this CDW narrative.

Build Your Own CDW Narrative

If you are not convinced by this story or prefer to lean on your own work, you can test the assumptions yourself in minutes with Do it your way.

A great starting point for your CDW research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If CDW has your attention, do not stop there. Use this moment to scan fresh ideas and keep your watchlist working hard for you.

• Spot potential mispricings by reviewing these 864 undervalued stocks based on cash flows that may offer more attractive entry points than what you see in the broader market.
• Ride major tech shifts by checking out these 24 AI penny stocks that connect artificial intelligence themes with listed companies around the world.
• Stay ahead of digital finance trends by scanning these 18 cryptocurrency and blockchain stocks that are building businesses around cryptocurrencies and blockchain technology.

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.

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