CDW (NASDAQ:CDW) Shares Gap Up on Better-Than-Expected Earnings

CDW Co. (NASDAQ:CDW)’s share price gapped up prior to trading on Wednesday following a better than expected earnings announcement. The stock had previously closed at $199.34, but opened at $222.91. CDW shares last traded at $212.30, with a volume of 545,872 shares changing hands.

The information technology services provider reported $2.40 earnings per share for the quarter, beating the consensus estimate of $2.33 by $0.07. CDW had a net margin of 5.33% and a return on equity of 58.31%.

CDW Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Tuesday, March 11th. Investors of record on Tuesday, February 25th will be paid a $0.625 dividend. This represents a $2.50 annualized dividend and a yield of 1.25%. The ex-dividend date is Tuesday, February 25th. CDW’s payout ratio is 30.56%.

CDW declared that its Board of Directors has authorized a stock repurchase plan on Wednesday, February 5th that permits the company to repurchase $750.00 million in shares. This repurchase authorization permits the information technology services provider to buy up to 2.7% of its shares through open market purchases. Shares repurchase plans are often a sign that the company’s management believes its stock is undervalued.

Wall Street Analyst Weigh In

Several analysts have commented on CDW shares. UBS Group lowered their price target on CDW from $233.00 to $220.00 and set a “buy” rating for the company in a report on Tuesday, January 7th. Redburn Atlantic started coverage on CDW in a report on Friday, November 15th. They issued a “buy” rating and a $230.00 price target for the company. JPMorgan Chase & Co. cut CDW from an “overweight” rating to a “neutral” rating and lowered their price target for the company from $260.00 to $235.00 in a report on Monday, October 28th. Barclays lifted their price target on CDW from $201.00 to $223.00 and gave the company an “equal weight” rating in a report on Thursday. Finally, Morgan Stanley lifted their price target on CDW from $193.00 to $201.00 and gave the company an “equal weight” rating in a report on Thursday. Four equities research analysts have rated the stock with a hold rating and five have issued a buy rating to the stock. According to MarketBeat, CDW currently has an average rating of “Moderate Buy” and a consensus target price of $242.67.

Institutional Trading of CDW

Institutional investors have recently modified their holdings of the company. Canoe Financial LP purchased a new stake in shares of CDW during the 3rd quarter worth about $37,000. Fortitude Family Office LLC boosted its holdings in CDW by 350.0% in the 3rd quarter. Fortitude Family Office LLC now owns 171 shares of the information technology services provider’s stock worth $39,000 after acquiring an additional 133 shares during the period. Allworth Financial LP boosted its holdings in CDW by 39.7% in the 4th quarter. Allworth Financial LP now owns 183 shares of the information technology services provider’s stock worth $32,000 after acquiring an additional 52 shares during the period. Ashton Thomas Securities LLC purchased a new position in CDW in the 3rd quarter worth approximately $43,000. Finally, Parkside Financial Bank & Trust boosted its holdings in CDW by 38.9% in the 4th quarter. Parkside Financial Bank & Trust now owns 207 shares of the information technology services provider’s stock worth $36,000 after acquiring an additional 58 shares during the period. Hedge funds and other institutional investors own 93.15% of the company’s stock.

CDW Stock Performance

The stock has a market cap of $26.63 billion, a PE ratio of 24.43, a PEG ratio of 5.39 and a beta of 1.01. The stock has a fifty day simple moving average of $183.54 and a two-hundred day simple moving average of $202.63. The company has a debt-to-equity ratio of 2.39, a quick ratio of 1.28 and a current ratio of 1.40.

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security.