US$76.00 - That's What Analysts Think PC Connection, Inc. (NASDAQ:CNXN) Is Worth After These Results

Simply Wall St.
02-08

It's been a sad week for PC Connection, Inc. (NASDAQ:CNXN), who've watched their investment drop 14% to US$63.51 in the week since the company reported its annual result. It was a credible result overall, with revenues of US$2.8b and statutory earnings per share of US$3.29 both in line with analyst estimates, showing that PC Connection is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for PC Connection

NasdaqGS:CNXN Earnings and Revenue Growth February 8th 2025

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 an okay 5.6% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$3.33, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting 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 small dip in 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PC Connection's past performance and to peers in the same industry. 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. We have analyst estimates for PC Connection going out as far as 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with PC Connection .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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