CDW (CDW) shares ended the last trading session 9.2% higher at $159.48. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.1% loss over the past four weeks.
The increase in share price can be attributed to the expanding business momentum that CDW is experiencing across all its sales units and global markets.
CDW’s cloud and SaaS business has experienced strong growth. In the fourth quarter, software sales increased by 5%, driven by double-digit growth in SaaS and IaaS. Customers concentrated on cost savings, opting for cloud, SaaS, and consulting services. The cloud significantly impacted profits, with gross profit rising in the mid-teens. Security also contributed, showing high single-digit growth in both revenue and profit. Services experienced high demand, resulting in a 10% revenue increase and double-digit profit growth. CDW Managed Services grew by over 20%. With more than 250,000 customers, CDW aims to remain a top IT partner and plans to outpace the U.S. IT market by 2–3% in 2025.
Synergy from Mission Cloud Services acquired in December 2024, bodes well for the company’s prospects. CDW’s share buyback programs and robust cash flow are other tailwinds.
This information technology company is expected to post quarterly earnings of $1.96 per share in its upcoming report, which represents a year-over-year change of +2.1%. Revenues are expected to be $4.9 billion, up 0.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For CDW, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CDW going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
CDW is part of the Zacks Computers - IT Services industry. Taboola.com Ltd. (TBLA), another stock in the same industry, closed the last trading session 9.1% higher at $2.77. TBLA has returned -12.1% in the past month.
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CDW Corporation (CDW): Free Stock Analysis Report Taboola.com Ltd. (TBLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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