3 Reasons CDW is Risky and 1 Stock to Buy Instead

CDW has gotten torched over the last six months - since September 2025, its stock price has dropped 25.9% to $124.43 per share. This might have investors contemplating their next move.

Is there a buying opportunity in CDW, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Is CDW Not Exciting?

Even though the stock has become cheaper, we don't have much confidence in CDW. Here are three reasons we avoid CDW and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, CDW’s 4% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the business services sector.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect CDW’s revenue to rise by 2.8%, close to its 4% annualized growth for the past five years. This projection doesn't excite us and suggests its newer products and services will not catalyze better top-line performance yet.

3. EPS Growth Has Stalled Over the Last Two Years

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

CDW’s flat EPS over the last two years was worse than its 2.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

CDW’s business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 11.9× forward P/E (or $124.43 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere. We’d recommend looking at the most entrenched endpoint security platform on the market.

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