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Vernon Hills, Illinois-based CDW Corporation (CDW) provides information technology (IT) solutions in the U.S., U.K., and Canada. With a market cap of $30.9 billion, CDW operates through Corporate, Small Business, and Public segments.
Companies valued at $10 billion or more are typically classified as “large-cap” stocks, and CDW Corporation rightly fits into that category. CDW is a key player in the tech industry, providing a comprehensive suite of products and services, including hardware, software, and integrated IT solutions, to help organizations strengthen their technological infrastructure and foster innovation.
But it's not all smooth sailing for the stock. CDW shares are trading 32.5% below their 52-week high of $263.37, which they hit on Apr. 4. Also, the stock has declined 19.7% over the past three months, underperforming the Technology Select Sector SPDR Fund’s (XLK)10% rise during the same time frame.
In the longer term, CDW is down 21.8% on a YTD basis, and the shares have dipped 20.4% over the past 52 weeks. In comparison, the XLK has gained 25.4% in 2024 and 26% over the past year.
To confirm its bearish trend, CDW has been trading below its 200-day moving average since mid-September and under the 50-day moving average since late October.
CDW Corporation has underperformed the broader market over the past year, primarily due to headwinds in its hardware solutions segment. Prolonged sales cycles, macroeconomic uncertainties, and heightened competition have posed significant challenges, with a notable 12% decline in government sales within the public sector, further impacting its performance.
On Oct. 30, CDW stock dipped 11.3% after the company announced its mixed third-quarter results. Its adjusted EPS of $2.63 and revenue of $5.5 billion fell short of Street forecasts.
Highlighting the contrast in performance, rival Arista Networks, Inc. (ANET) has outperformed CDW and the border index, with a 97.8% gain over the 52 weeks.
Despite CDW's recent underperformance compared to the tech sector, analysts are moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from 12 analysts in coverage. The mean price target is $227.64, which suggests a premium of 28% to its current price levels.
