PC Connection, Inc. (NASDAQ:CNXN) Released Earnings Last Week And Analysts Lifted Their Price Target To US$70.00
PC Connection, Inc. (NASDAQ:CNXN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. PC Connection reported in line with analyst predictions, delivering revenues of US$2.9b and statutory earnings per share of US$3.15, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for PC Connection
After the latest results, the dual analysts covering PC Connection are now predicting revenues of US$2.98b in 2024. If met, this would reflect a reasonable 4.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 10% to US$3.50. Before this earnings report, the analysts had been forecasting revenues of US$2.92b and earnings per share (EPS) of US$3.41 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for PC Connection 6.1% to US$70.00on the back of these upgrades.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting PC Connection's growth to accelerate, with the forecast 4.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. PC Connection is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PC Connection following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for PC Connection that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
