PC Connection, Inc. (NASDAQ:CNXN) Released Earnings Last Week And Analysts Lifted Their Price Target To US$76.00

There's been a notable change in appetite for PC Connection, Inc. (NASDAQ:CNXN) shares in the week since its full-year report, with the stock down 14% to US$63.51. PC Connection reported in line with analyst predictions, delivering revenues of US$2.8b and statutory earnings per share of US$3.29, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for PC Connection

Taking into account the latest results, the consensus forecast from PC Connection's two analysts is for revenues of US$2.96b in 2025. This reflects a reasonable 5.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$3.33, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.93b and earnings per share (EPS) of US$3.59 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.6% to US$76.00, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting PC Connection's growth to accelerate, with the forecast 5.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.4% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, PC Connection is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for PC Connection. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for PC Connection you should be aware of.

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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.