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CDW Stock Plummets Despite Beating Earnings Expectations
10 Dec
Summary
- CDW's stock has fallen 34.4% from its 52-week high.
- Third-quarter results showed better-than-expected adjusted EPS.
- Concerns grew over increased expenses and slowing demand in key areas.
Vernon Hills-based CDW Corporation, a major provider of information technology solutions across the United States, United Kingdom, and Canada, is facing significant headwinds in its stock performance. The company's shares have plummeted 34.4% from their 52-week high, and have seen a 12.9% decline over the past three months, underperforming the broader market averages. This downturn occurred despite CDW reporting better-than-expected adjusted earnings per share of $2.71 and revenue of $5.74 billion for its third quarter of 2025.
Investor confidence was shaken by a surge in selling and administrative expenses, which rose by 12.9%. Furthermore, the company witnessed a slowdown in demand in crucial areas, evidenced by an 8.5% revenue decline in its Education segment and softness in data storage and server markets. These factors contributed to an 8.5% drop in CDW's stock on November 4th, highlighting investor apprehension about the company's operational efficiency and market traction.
Despite its recent stock struggles and underperformance compared to rivals like IBM, analysts maintain a moderately optimistic outlook on CDW. The consensus rating among 12 covering analysts is a "Moderate Buy," with a mean price target suggesting a potential 24.9% upside from current trading levels. This suggests that while current market conditions are challenging, there is underlying belief in CDW's long-term prospects and its ability to navigate these difficulties.
