The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Ingram Micro (NYSE: INGM) and the rest of the it distribution & solutions stocks fared in Q1.
IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.
The 8 it distribution & solutions stocks we track reported a mixed Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 4.2% on average since the latest earnings results.
Ingram Micro (NYSE: INGM)
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE: INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.
Ingram Micro reported revenues of $12.28 billion, up 8.3% year on year. This print exceeded analysts’ expectations by 5.8%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.
The stock is up 1.7% since reporting and currently trades at $20.05.
Read our full report on Ingram Micro here, it’s free.
Best Q1: Connection (NASDAQ: CNXN)
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ: CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Connection reported revenues of $701 million, up 10.9% year on year, outperforming analysts’ expectations by 8.5%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates.
Connection achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 4.8% since reporting. It currently trades at $65.04.
Is now the time to buy Connection? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: TD SYNNEX (NYSE: SNX)
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE: SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
TD SYNNEX reported revenues of $14.53 billion, up 4% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a miss of analysts’ EPS estimates.
As expected, the stock is down 1.5% since the results and currently trades at $123.51.
Read our full analysis of TD SYNNEX’s results here.
CDW (NASDAQ: CDW)
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ: CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
CDW reported revenues of $5.20 billion, up 6.7% year on year. This print topped analysts’ expectations by 5.3%. It was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates.
The stock is up 8.7% since reporting and currently trades at $178.24.
Read our full, actionable report on CDW here, it’s free.
ePlus (NASDAQ: PLUS)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
ePlus reported revenues of $498.1 million, down 10.2% year on year. This number came in 4.9% below analysts' expectations. In spite of that, it was a satisfactory quarter as it produced an impressive beat of analysts’ EPS estimates.
The stock is up 8% since reporting and currently trades at $71.11.
Read our full, actionable report on ePlus here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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