Performance Comparison: CDW And Competitors In Electronic Equipment, Instruments & Components Industr

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating CDW (NASDAQ:CDW) against its key competitors in the Electronic Equipment, Instruments & Components industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

CDW Background

CDW Corp is a value-added reseller operating in the U.S. (95% of sales) and Canada (5%). The company has more than 100,000 products on its line of cards that range from notebooks to data center software. Roughly half of CDW's revenue comes from midsize and large businesses, with the remaining from small businesses, government agencies, education institutions, and health-care organizations.

Company	P/E	P/B	P/S	ROE	EBITDA (in billions)	Gross Profit (in billions)	Revenue Growth
CDW Corp	25.83	16.87	1.24	16.5%	$0.48	$1.18	-8.46%
TD Synnex Corp	13.93	1.07	0.15	1.67%	$0.24	$0.97	-0.72%
Arrow Electronics Inc	6.10	1.20	0.20	4.26%	$0.44	$1.07	-10.0%
Insight Enterprises Inc	19.71	3.23	0.54	5.12%	$0.13	$0.43	-14.35%
Avnet Inc	5.83	0.92	0.17	3.31%	$0.3	$0.82	2.86%
ePlus Inc	12.99	2.11	0.78	4.24%	$0.05	$0.14	25.27%
PC Connection Inc	18.64	1.76	0.47	2.51%	$0.03	$0.13	-11.46%
ScanSource Inc	8.99	0.86	0.21	2.11%	$0.04	$0.11	-1.57%
Climb Global Solutions Inc	16.08	2.87	0.55	2.07%	$0.0	$0.01	20.44%
Richardson Electronics Ltd	6.84	0.95	0.59	2.62%	$0.0	$0.02	-4.54%
Average	12.12	1.66	0.41	3.1%	$0.14	$0.41	0.66%

Upon closer analysis of CDW, the following trends become apparent:

At 25.83, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.13x, suggesting a premium valuation relative to industry peers.
With a Price to Book ratio of 16.87, which is 10.16x the industry average, CDW might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
The Price to Sales ratio of 1.24, which is 3.02x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 16.5% is 13.4% above the industry average, highlighting efficient use of equity to generate profits.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $480 Million, which is 3.43x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
The gross profit of $1.18 Billion is 2.88x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
With a revenue growth of -8.46%, which is much lower than the industry average of 0.66%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By analyzing CDW in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

CDW exhibits a relatively higher debt-to-equity ratio of 3.68 compared to its top 4 peers, suggesting a higher proportion of debt in the company's capital structure.
This higher level of debt can pose greater financial risk.

Key Takeaways

CDW's high PE, PB, and PS ratios suggest that the company is trading at a premium compared to its peers in the Electronic Equipment, Instruments & Components industry. This indicates that investors are willing to pay a higher price for CDW's earnings, book value, and sales. On the other hand, CDW's high ROE, EBITDA, gross profit, and low revenue growth indicate that the company is generating strong profitability and efficiency, but experiencing slower revenue growth compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

CDWCDW Corp

$134.010.04%

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Performance Comparison: CDW And Competitors In Electronic Equipment, Instruments &amp; Components Industry

CDW Background

Debt To Equity Ratio

Key Takeaways

Performance Comparison: CDW And Competitors In Electronic Equipment, Instruments & Components Industry