CDW (CDW): Assessing Valuation Following Q3 Results, Dividend Hike, and Share Buybacks

CDW (CDW) just reported its third quarter financial results, capturing investor focus with updates on sales and profits. The company also raised its quarterly dividend slightly and revealed recent share buyback activity.

See our latest analysis for CDW.

CDW shares are hovering near $145 after a steady stream of company updates, including a dividend hike and continued share repurchases. While the stock has lost ground this year with a year-to-date share price return of -14.7% and a one-year total shareholder return of -17.2%, the latest moves signal management’s commitment to rewarding shareholders and suggest the company is working to bolster long-term confidence despite recent market pressures. CDW’s longer-term performance, though mixed, is still positive over the last five years, which hints at resilience even as near-term momentum has slowed.

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With the stock trading at a noticeable discount to analyst targets and long-term growth trends holding steady, investors may wonder if CDW is currently undervalued or if the market has already accounted for its potential rebound.

Most Popular Narrative: 20% Undervalued

Market watchers see CDW trading around $145, well below what the most followed narrative sees as fair value. The narrative builds on projections for improved profit margins and robust long-term earnings, painting a scenario where today's price leaves room for significant upside.

Expansion of CDW's software, professional, and managed services capabilities—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 know which critical shifts in revenue mix and profitability are powering this bold valuation? The real surprise comes from how analysts expect recurring revenue growth to transform CDW’s earnings potential. Find out which aggressive financial targets lie beneath the surface and what the narrative believes about the market’s next move.

Result: Fair Value of $182 (UNDERVALUED)

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

However, sustained federal funding cuts or ongoing margin pressure from increased hardware mix could quickly challenge CDW’s path to lasting profit growth and valuation upside.

Find out about the key risks to this CDW narrative.

Build Your Own CDW Narrative

If you want to dig deeper or form your own view of CDW's potential, the data is at your fingertips. You can craft your own take in just a few minutes Do it your way

A great starting point for your CDW research is our analysis highlighting 4 key rewards and 1 important warning sign 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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