NasdaqGS:CNXN

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet and fair value.


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


Market Performance


7 Day Return

-2.2%

CNXN

1.1%

US Electronic

1.3%

US Market


1 Year Return

5.2%

CNXN

10.2%

US Electronic

5.9%

US Market

Return vs Industry: CNXN underperformed the US Electronic industry which returned 10.2% over the past year.

Return vs Market: CNXN underperformed the US Market which returned 5.9% over the past year.


Shareholder returns

CNXNIndustryMarket
7 Day-2.2%1.1%1.3%
30 Day3.7%-2.5%-1.9%
90 Day13.6%0.3%-1.8%
1 Year6.4%5.2%11.3%10.2%8.3%5.9%
3 Year55.0%49.6%52.5%48.2%45.6%36.2%
5 Year88.9%75.9%89.0%79.9%66.1%47.9%

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

Valuation

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

14.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: CNXN ($38.7) is trading above our estimate of fair value ($28.81)

Significantly Undervalued: CNXN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CNXN is good value based on its PE Ratio (14.4x) compared to the Electronic industry average (19x).

PE vs Market: CNXN is good value based on its PE Ratio (14.4x) compared to the US market (17.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: CNXN is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: CNXN is good value based on its PB Ratio (1.8x) compared to the US Electronic industry average (2x).


Next Steps

Future Growth

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

5.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNXN's forecast earnings growth (5% per year) is above the savings rate (2.7%).

Earnings vs Market: CNXN's earnings (5% per year) are forecast to grow slower than the US market (14.4% per year).

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

Revenue vs Market: CNXN's revenue (4.1% per year) is forecast to grow slower than the US market (7.3% per year).

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


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if CNXN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has PC Connection performed over the past 5 years?

10.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CNXN's earnings have grown by 10.9% per year over the past 5 years.

Accelerating Growth: CNXN's earnings growth over the past year (12.8%) exceeds its 5-year average (10.9% per year).

Earnings vs Industry: CNXN earnings growth over the past year (12.8%) underperformed the Electronic industry 58.6%.


Return on Equity

High ROE: CNXN's Return on Equity (12.8%) is considered low.


Return on Assets

ROA vs Industry: CNXN has a higher Return on Assets than the Electronic industry average last year.


Return on Capital Employed

ROCE Improving: CNXN's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is PC Connection's financial position?


Financial Position Analysis

Short Term Liabilities: CNXN's short term assets ($753.7M) exceeds its short term liabilities ($321.2M)

Long Term Liabilities: CNXN's short term assets (753.7M) exceeds its long term liabilities (30.4M)


Debt to Equity History and Analysis

Debt Level: CNXN is debt free.

Reducing Debt: CNXN had no debt 5 years ago.

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

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


Balance Sheet

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

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


Next Steps

Dividend

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

0.83%

Current Dividend Yield


Dividend Yield vs Market

company0.8%marketbottom25%1.5%markettop25%3.8%industryaverage1.6%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CNXN's dividend (0.83%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: CNXN's dividend (0.83%) is low compared to the top 25% of dividend payers in the US market (3.77%).

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

Growing Dividend: CNXN 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

What is the CEO of PC Connection's salary, the management and board of directors tenure and is there insider trading?

17.7yrs

Average board tenure


CEO

Tim McGrath (60yo)

8.2yrs

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 ($USD4.49M) is about average for companies of similar size in the US market ($USD2.76M).

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


Board Age and Tenure

17.7yrs

Average Tenure

70yo

Average Age

Experienced Board: CNXN's board of directors are seasoned and experienced ( 17.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$963,58906 Mar 19
Joseph Baute
EntityIndividual
Shares25,160
Max PriceUS$40.29
SellUS$493,72206 Mar 19
David Beffa-Negrini
EntityIndividual
Role
Member of the Board of Directors
Director
Shares12,300
Max PriceUS$40.14
SellUS$124,95020 Feb 19
Jack Ferguson
EntityIndividual
Role
Member of the Board of Directors
Director
Shares3,000
Max PriceUS$41.65

Ownership Breakdown


Management Team

  • Pat Gallup (65yo)

    Co-Founder

    • Tenure: 25.1yrs
    • Compensation: US$816.38k
  • David Hall (70yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$305.00k
  • Tim McGrath (60yo)

    President & CEO

    • Tenure: 8.2yrs
    • Compensation: US$4.49m
  • Tom Baker (54yo)

    Senior VP

    • Tenure: 0.7yrs

Board Members

  • Pat Gallup (65yo)

    Co-Founder

    • Tenure: 25.1yrs
    • Compensation: US$816.38k
  • David Hall (70yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$305.00k
  • David Beffa-Negrini (65yo)

    Director

    • Tenure: 25.1yrs
    • Compensation: US$205.00k
  • Barbara Duckett (74yo)

    Director

    • Tenure: 10.3yrs
    • Compensation: US$225.00k
  • Jack Ferguson (80yo)

    Director

    • Tenure: 3.4yrs
    • Compensation: US$230.00k

Company Information

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


Key Information

  • Name: PC Connection, Inc.
  • Ticker: CNXN
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: US$1.019b
  • Shares outstanding: 26.32m
  • Website: https://www.connection.com

Number of Employees


Location

  • PC Connection, Inc.
  • 730 Milford Road
  • Merrimack
  • New Hampshire
  • 3054
  • 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. It operates through three segments: Business Solutions, Enterprise Solutions, and Public Sect ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 23:40
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.