Valued at a market cap of $23.9 billion, CDW Corporation (CDW) provides comprehensive Information Technology (IT) solutions to small, medium, and large businesses, as well as government, education, and healthcare clients. The Vernon Hills, Illinois-based company offers a wide range of hardware and software products, along with integrated IT services. These include both on-premise and cloud-based solutions, spanning hybrid infrastructure, digital experience, and cybersecurity.

Shares of this IT company have lagged behind the broader market over the past 52 weeks. CDW has declined 21.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 9.8%. However, on a YTD basis, the stock is up 4.5%, outpacing SPX’s marginal drop. 

Narrowing the focus, CDW has also underperformed the Fidelity MSCI Information Technology Index ETF’s (FTEC) 11.5% uptick over the past 52 weeks. Nonetheless, it has outperformed the ETF’s 3.3% loss on a YTD basis. 

On May 7, CDW delivered better-than-expected Q1 results, prompting its share price to close up by 7.1%. Its revenue of $5.2 billion and adjusted EPS of $2.15 handily surpassed the consensus estimates and grew by 6.7% and 12% respectively, from the year-ago quarter. Moreover, its average daily sales advanced 8.4% year-over-year to $82.5 million. The strong performance was driven by growth in sales across all its reportable segments, supported by improved customer spending and increased demand for mobile devices, desktops, software, and related services. Additionally, while gross profit margin declined, an increase in adjusted operating margin helped support overall profitability.

For the current fiscal year, ending in December, analysts expect CDW’s EPS to grow 1.1% year over year to $9.34. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in two of the last four quarters, while missing on two other occasions. 

Among the 11 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on five “Strong Buy,” two “Moderate Buy,” and four “Hold” ratings. 

This configuration is slightly more bullish than two months ago, with one analyst suggesting a “Moderate Buy” rating. 

On May 12, Evercore Inc. (EVR) analyst Amit Daryanani maintained a “Buy” rating on CDW and set a price target of $215, which indicates an 18.2% potential upside from the current levels. 

The mean price target of $205.50 represents a 13% premium from CDW’s current price levels, while the Street-high price target of $230 suggests an upside potential of 26.5%.