| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 71 | 18.4x | 17.8x | Top tier | |
Growth | 31 | 7.4% | 7.1% | Bottom tier | |
Quality | 72 | 15.7% | 4.5% | Top tier | |
Safety | 44 | 2.9x | 2.6x | Around median | |
Capital Return | 50 | 1.66% | 2.12% | Around median | |
Momentum | 58 | -14.4% | 2.9% | Around median | |
Sentiment | 62 | 8 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
CDW Corporation operates as an integrated provider of information technology solutions, bringing together hardware, software, cloud computing, cybersecurity, and professional and managed services to help customers modernize, operate, and protect their technology infrastructure. Its U.S. business is divided among commercial, government, and education sectors, while the international segment includes operations in the United Kingdom and Canada; in Q2 of fiscal 2026, commercial segment sales grew 9%, government approximately 14%, education approximately 1%, and international approximately 23%.
In Q2 of fiscal 2026, CDW generated record net sales of $6.6 billion, up 10%, and record gross profit of $1.3 billion, up 6.3%. Adjusted net income reached $370 million, up 7.8%, and adjusted diluted earnings per share were $2.91, up 11.9% and exceeding expectations of $2.80, while adjusted operating income rose 7% to $556 million and its margin reached 8.5%.
The revenue mix showed strength in infrastructure, with hardware revenue growing 10%, servers, storage, and networking equipment achieving double-digit growth, and notebooks and desktops combined rising 10%. Software also grew at a double-digit rate, and cybersecurity delivered double-digit growth in revenue and gross profit, while services increased only 1%. A greater weighting toward large, relatively low-margin deals caused gross margin to decline 70 basis points to 20.1%, despite record sales, gross profit, and adjusted earnings per share.
The average analyst price target is $144.2, within a wide range of $123 to $171, and the stock carries a “Buy” consensus; the average target is below the 52-week range high of $171.55, while the highest target nearly matches it. A price-to-earnings ratio is not available in the provided data, so the risk assessment is based on the breadth of the target range and the 52-week range of $97.12 to $171.55, balancing sales growth and the raised outlook against the 70-basis-point decline in gross margin and expectations of continued margin pressure during the second half of fiscal 2026.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Net sales rose 10% to a record $6.6 billion, driven by demand for infrastructure modernization, AI readiness, and cybersecurity. Hardware revenue grew 10%, servers, storage, and networking equipment recorded double-digit growth, and notebooks and desktops combined rose 10%. By customer segment, commercial grew 9%, government approximately 14%, and international approximately 23%, while education growth was limited to approximately 1%.
CDW sells infrastructure, cloud computing, security, and data components, then targets design, deployment, and management services across the project lifecycle. In Q2 fiscal 2026, it used the AI 360 Framework in a multiyear, multimillion-dollar engagement for a technology office in a western state and is working to turn the solution into a product for local and state governments. Through Claude Mythos AI, it also executed a multimillion-dollar engagement for a large financial services company to automate vulnerability detection and remediation.
The market reaction focused on the decline in gross margin to 20.1%, down 70 basis points year over year, after the margin came in below Wall Street estimates. The pressure resulted primarily from the increased weighting of large, relatively low-margin infrastructure deals, the greater contribution from enterprise customers, and the lower relative contribution from services. Consequently, the stock fell 14% in premarket trading on August 5, 2026 despite sales growth of 10% and an 11.9% increase in adjusted diluted earnings per share to $2.91.
Automated analysis for informational purposes only — not investment advice.
Management expects the addressable U.S. information technology market to grow at a mid-single-digit rate, with CDW outperforming it by 200 to 300 basis points. It expects fiscal 2026 gross profit to grow at a mid-single-digit rate and adjusted diluted earnings per share to grow at the high end of a high-single-digit range. Conversely, it expects second-half margins to be below second-half fiscal 2025 levels and fiscal 2026 margin to be slightly lower than fiscal 2025.
Adjusted free cash flow was $278 million in the first half of fiscal 2026, equal to 42% of adjusted net income, below the targeted conversion baseline of 80% to 90%. The company attributed this primarily to investment in working capital, including an approximately $400 million increase in inventory since the end of fiscal 2025, and expects to reduce it during the remainder of fiscal 2026. Net debt was $5.5 billion and net leverage was 2.5 times at the end of Q2 fiscal 2026, within the targeted range of two to three times, with liquidity of $2 billion.
CDW announced on August 5, 2026 that Albert Miralles plans to retire in 2027 after completing an orderly transition. He will remain in his current role as Chief Financial Officer until a successor is appointed, then continue serving in an advisory capacity to ensure continuity. The company confirmed that the search for his successor was underway at the time of the Q2 fiscal 2026 earnings call.
