CDW (CDW): Assessing Valuation After a Recent Share Price Rebound

CDW (CDW) has quietly bounced about 5% over the past month even as it remains down roughly 12% year to date, a setup that has value focused investors taking a closer look.

See our latest analysis for CDW.

That recent 5% one month share price return has only partially chipped away at a tougher stretch, with the share price still down close to 12% year to date and longer term total shareholder returns moderating from the strong gains of the past five years. This suggests momentum is rebuilding but not yet on a firm uptrend.

If CDW has you thinking about where the next leg of tech growth might come from, this could be a good moment to explore high growth tech and AI stocks as potential additions to your watchlist.

With earnings still growing and the stock trading at a discount to analyst targets, the key question now is whether CDW is genuinely undervalued or whether the market is already pricing in its next phase of growth?

Most Popular Narrative Narrative: 17.7% Undervalued

With CDW last closing at $149.86 against a narrative fair value near $182, the spread reflects a confident long term earnings and margin story.

Expansion of CDW's software, professional, and managed services capabilities, which are now core to both strategy and recent M&A focus, continues to elevate recurring revenue and expand margins, supporting resilient long term earnings growth.

Read the complete narrative.

Want to see how modest top line growth, rising margins and a richer services mix combine into that higher valuation? The narrative’s earnings roadmap may surprise you.

Result: Fair Value of $182 (UNDERVALUED)

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

However, softer federal and education spending and ongoing margin pressure from lower margin hardware heavy deals could undermine the long term software and services thesis.

Find out about the key risks to this CDW narrative.

Build Your Own CDW Narrative

If you see the story differently or simply prefer digging into the numbers yourself, you can build a custom narrative in just minutes: 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.

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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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