Start here if you're new
what it is
PC Connection sells computers, software, networking gear, and setup services to businesses, schools, and government buyers.
how it gets paid
Last year Pc Connection made $2.9B in revenue. Computer systems was the main engine at $1.2B, or 41% of sales.
why it's growing
Revenue grew 2.5% last year. Revenue was $2.2B, up 206% vs. prior year, and EPS was $2.45, up 153% vs. prior year.
what just happened
The latest quarter delivered $2.2B of revenue and $2.45 of EPS.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
21.1x trailing p/e — priced about right
1.3% dividend yield — cash in your pocket every quarter
9.6% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
PC Connection sells computers, software, networking gear, and setup services to businesses, schools, and government buyers.
You are looking at a reseller with $0 of long-term debt and a B++ balance sheet. That matters because a bad year does not trigger a lender conversation. Instant translation: gross margin means money left after product costs. PC Connection kept 18.6% there, then ended with 3.9% operating margin, so most of the spread gets spent on payroll, logistics, and selling.
How they make money
$2.9B
annual revenue · their business grew +2.5% last year
Computer systems
$1.2B
Software
$0.7B
Data center solutions
$0.4B
Networking communications
$0.3B
Services
$0.3B
The products that matter
serves midmarket customers
Business Solutions
$1.7B · 58.6% of revenue
this is the center of gravity at $1.7B. when nearly 59% of revenue sits in one segment, small execution changes here matter more than anything happening elsewhere.
largest segment
sells to government buyers
Public Sector
$0.7B · 24.1% of revenue
at 24.1% of revenue, this segment gives you contract-driven demand and budget exposure. good for stability. bad for speed.
contract heavy
supports large accounts
Enterprise Solutions
$0.5B · 17.2% of revenue
this is the smallest reporting segment at 17.2% of revenue. even strong execution here will not fully offset weakness in the core business.
smallest bucket
Key numbers
$2.9B
annual revenue
This is the size of the whole machine. A 2.5% sales bump is only about $73M on that base.
3.9%
operating margin
You keep 3.9 cents from each sales dollar after overhead. The rest gets spent before it reaches you.
0
long-term debt
No long-term debt means no lender gets paid before you do. That matters when sales are only growing 2.5%.
9.6%
return on capital
For every $1 tied up in the business, PC Connection makes $0.096 in operating profit. That is fine, not flashy.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt $0M (0% of capital)
B++ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for CNXN right now.
source: institutional data · return history unavailable
What just happened
beat estimates
The latest quarter delivered $2.2B of revenue and $2.45 of EPS.
Revenue was $2.2B, up 206% vs. prior year, and EPS was $2.45, up 153% vs. prior year. Gross margin held at 18.6%, which kept the business from turning busy into profitable.
$2.2B
revenue
$2.45
eps
18.6%
gross margin
the number that mattered
18.6% gross margin mattered most because it shows how much room the company has before costs eat the sale.
source: company earnings report, 2024
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What could go wrong
The #1 risk is direct-vendor and ecommerce disintermediation in IT procurement. CNXN makes money by sitting in the middle. The middle gets squeezed first.
med
direct sellers can undercut the middleman
Amazon, Best Buy, and major vendors can sell hardware and software directly. CNXN's 3.9% operating margin leaves very little room for price competition to get ugly.
If gross profit gets squeezed even modestly, the earnings multiple stops looking reasonable fast.
med
thin-margin businesses do not get many mistakes
Annual revenue declined 1.7% last year. When the company is already operating on a 3.9% operating margin, small revenue slippage can hit profit harder than you expect.
This is the math problem with distributors: costs rarely fall as neatly as demand does.
med
budget timing matters more than the ticker makes obvious
Public Sector and Enterprise Solutions combine for 41.3% of revenue. That ties a large part of the business to procurement cycles, contract timing, and customer budget discipline.
Orders can move to the right without being lost, but the stock still has to live through the waiting.
med
holder exits can outweigh quiet fundamentals
Institutional ownership sits at 42.9%, and a major holder cut 16.2% of its stake last quarter. That is not a referendum on the whole business, but it can pressure a small-cap stock anyway.
You can be right on the company and still spend months waiting for the shareholder base to settle down.
This is a no-moat, thin-margin distributor. If revenue stays soft and the 3.9% operating margin slips, a 21.1x multiple starts to look generous.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
the 3.9% operating margin
This is the number that matters most. If it holds, the valuation can survive. If it slips, the whole quality argument gets thinner.
calendar
feb. 17, 2026 ex-dividend date
The next $0.20 quarterly dividend goes ex-dividend on February 17, 2026. Good to know if you own it for the cash return, small as it is.
revenue
whether $3B starts moving again
Revenue declined 1.7% last year. You want to see stabilization first, then proof that growth can outrun the low-single-digit profile on this page.
ownership
if the 16.2% holder sale becomes a pattern
With 42.9% institutional ownership, one exit is a datapoint. Several exits become a stock problem.
Analyst rankings
earnings predictability
75 / 100
in human-speak, analysts see a business that usually lands near expectations. less drama. less upside surprise.
price stability
80 / 100
the stock tends to move like a steady small cap, not a high-beta trade. good if you want fewer shocks. less fun if you want torque.
risk rank
3
that puts CNXN in the safer half of the market. not ultra-defensive, but not a balance-sheet cliff either.
source: institutional data
Institutional activity
institutional ownership data for CNXN is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$59
current price
n/a
target midpoint · n/a from current
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