Is Insight Enterprises a Bargain After a 47% Slide in the Share Price?

• Wondering if Insight Enterprises is a beaten down opportunity or a value trap at today’s price? You are not the only one asking whether the current share price really reflects its underlying business.
• The stock has slid to around $79.62, with returns of about -6.3% over the last week, -11.6% over the last month, and a much steeper -46.7% year to date and -48.9% over the past year. This has reshaped how the market is pricing its future.
• Much of this shift has come as investors reassess IT solution providers in light of evolving enterprise tech spending and competitive pressures across the sector. At the same time, renewed interest in digital transformation and cloud services keeps Insight Enterprises in the conversation whenever long term technology partners are discussed.
• On our valuation framework, Insight Enterprises scores a 4/6. This suggests it screens as undervalued on several, but not all, of the usual checks. Next we will walk through the main valuation approaches behind that score, before finishing with a more complete way to think about what the stock might really be worth.

Find out why Insight Enterprises's -48.9% return over the last year is lagging behind its peers.

Approach 1: Insight Enterprises Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by taking its expected future cash flows and discounting them back to the present. For Insight Enterprises, the 2 Stage Free Cash Flow to Equity model starts with last twelve month Free Cash Flow of about $329.3 million, then projects how those cash flows might evolve over time.

Analysts expect Free Cash Flow to reach around $357 million by 2027, with Simply Wall St extrapolating this further to roughly $458 million by 2035. These projections, all in $, are then discounted using an appropriate rate of return to reflect risk and the time value of money. Adding those discounted values together produces an estimated intrinsic value of about $155.56 per share.

Compared to the current share price near $79.62, the DCF suggests Insight Enterprises is trading at roughly a 48.8% discount to its estimated fair value. This indicates the market may be pricing in a much weaker future than the cash flow outlook implies.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Insight Enterprises is undervalued by 48.8%. Track this in your watchlist or portfolio, or discover 909 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Insight Enterprises.

Approach 2: Insight Enterprises Price vs Earnings

For consistently profitable companies like Insight Enterprises, the price to earnings ratio is a useful way to see how much investors are willing to pay for each dollar of current earnings. A higher or lower PE often reflects what the market expects for future growth and how risky those earnings are perceived to be, so faster growing, more resilient businesses usually justify a higher, or premium, PE multiple.

Insight Enterprises currently trades on a PE of about 17.32x. This is slightly above the peer average of roughly 16.60x, but below the broader Electronic industry average of around 24.33x, suggesting the market is pricing it more cautiously than many sector names. Simply Wall St also calculates a proprietary Fair Ratio of 30.01x for Insight Enterprises, which represents the PE the company might reasonably command given its earnings growth outlook, industry, profit margins, size, and specific risks.

This Fair Ratio is more informative than a simple comparison with peers or the industry because it adjusts for Insight Enterprises unique fundamentals rather than assuming all companies deserve the same multiple. With the current PE of 17.32x sitting well below the Fair Ratio of 30.01x, the multiple based view points to the shares being undervalued.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Insight Enterprises Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple framework on Simply Wall St where you connect your view of a company’s story with concrete numbers by setting your own assumptions for future revenue, earnings, margins, and ultimately fair value. You can then compare that fair value to today’s price to decide whether to buy, hold, or sell.

A Narrative links three things together in one place: what you think is happening in the business, how that translates into a financial forecast, and what price you believe the stock is really worth. It lives in the Community page alongside Narratives from millions of other investors, updating dynamically as new earnings, news, or guidance are released.

For Insight Enterprises, one investor might build a bullish Narrative around successful AI and cloud transitions, using assumptions of higher revenue and margins to justify a fair value near the top of recent targets. A more cautious investor could focus on channel pressures and slower solutions adoption, choose lower growth and a smaller multiple, and arrive closer to the most conservative valuation. Both perspectives are automatically refreshed as new information comes in.

Do you think there's more to the story for Insight Enterprises? Head over to our Community to see what others are saying!

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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