📊 CNXN Key Takeaways
Is Pc Connection Inc. (CNXN) a Good Investment?
PC Connection demonstrates solid financial health with strong liquidity and zero leverage, but faces fundamental challenges inherent to computer distribution with thin 2.9% net margins and flat profitability growth. The company generates reliable free cash flow of $58M annually, though modest 2.5% revenue growth raises concerns about market competitiveness and expansion capacity.
PC Connection shows solid fundamental stability, with a debt-free balance sheet, strong liquidity, and consistently positive free cash flow. However, growth is modest and profitability remains structurally thin, with flat net income and slightly declining diluted EPS despite revenue expansion. The business appears financially healthy, but the quality of growth is only moderate because incremental sales are not translating into stronger earnings power.
Why Buy Pc Connection Inc. Stock? CNXN Key Strengths
- Exceptional liquidity with 2.90x current ratio and $193.2M cash providing operational flexibility
- Zero long-term debt and 0.00x debt-to-equity ratio eliminates financial risk and interest obligations
- Consistent free cash flow generation of $58M annually with strong interest coverage of 927.9x
- Reasonable asset efficiency with 6.2% ROA despite low-margin wholesale distribution business model
- Debt-free balance sheet with strong liquidity ratios and substantial cash reserves
- Positive operating cash flow and free cash flow with minimal capital intensity
- Stable profitability profile supported by decent gross margin and solid returns on equity and assets
CNXN Stock Risks: Pc Connection Inc. Investment Risks
- Anemic profitability with 2.9% net margin and 3.5% operating margin typical of commodity wholesale distribution
- Stagnant profitability growth despite 2.5% revenue growth suggests margin compression or cost pressures
- Limited organic growth at 2.5% YoY significantly lags technology sector growth rates and raises competitiveness concerns
- Low ROE of 9.2% indicates inefficient capital deployment relative to equity base of $910.1M
- Very thin operating and net margins leave limited room for execution mistakes or demand weakness
- Revenue growth is modest while net income is flat and EPS is slightly down, indicating weak operating leverage
- Low free cash flow margin suggests limited earnings expansion unless margin discipline improves
Key Metrics to Watch
- Gross margin trend - monitor for continued compression from vendor pricing or competitive pressure
- Operating cash flow conversion - ensure free cash flow sustainability as revenue grows
- Same-store revenue growth and market share metrics in key distribution channels
- Days inventory outstanding and inventory turnover ratios indicating supply chain efficiency
- Operating margin and net margin progression
- Free cash flow conversion relative to net income
Pc Connection Inc. (CNXN) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 2.0% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.90x current ratio provides a solid financial cushion.
CNXN Profit Margin, ROE & Profitability Analysis
CNXN vs Technology Sector: How Pc Connection Inc. Compares
How Pc Connection Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Pc Connection Inc. Stock Overvalued? CNXN Valuation Analysis 2026
Based on fundamental analysis, Pc Connection Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Pc Connection Inc. Balance Sheet: CNXN Debt, Cash & Liquidity
CNXN Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Pc Connection Inc.'s revenue has remained relatively flat over the 5-year period, with a 1% decline. The most recent EPS of $3.15 reflects profitable operations.
CNXN Revenue Growth, EPS Growth & YoY Performance
CNXN Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $709.1M | $24.7M | $0.97 |
| Q2 2025 | $736.5M | $24.8M | $0.97 |
| Q1 2025 | $632.0M | $13.2M | $0.50 |
| Q3 2024 | $693.1M | $25.6M | $0.97 |
| Q2 2024 | $733.5M | $19.7M | $0.75 |
| Q1 2024 | $632.0M | $13.2M | $0.50 |
| Q3 2023 | $693.1M | $23.2M | $0.88 |
| Q2 2023 | $733.5M | $19.7M | $0.75 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Pc Connection Inc. Dividends, Buybacks & Capital Allocation
CNXN SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Pc Connection Inc. (CIK: 0001050377)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CNXN
What is the AI rating for CNXN?
Pc Connection Inc. (CNXN) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CNXN's key strengths?
Claude: Exceptional liquidity with 2.90x current ratio and $193.2M cash providing operational flexibility. Zero long-term debt and 0.00x debt-to-equity ratio eliminates financial risk and interest obligations. ChatGPT: Debt-free balance sheet with strong liquidity ratios and substantial cash reserves. Positive operating cash flow and free cash flow with minimal capital intensity.
What are the risks of investing in CNXN?
Claude: Anemic profitability with 2.9% net margin and 3.5% operating margin typical of commodity wholesale distribution. Stagnant profitability growth despite 2.5% revenue growth suggests margin compression or cost pressures. ChatGPT: Very thin operating and net margins leave limited room for execution mistakes or demand weakness. Revenue growth is modest while net income is flat and EPS is slightly down, indicating weak operating leverage.
What is CNXN's revenue and growth?
Pc Connection Inc. reported revenue of $2.9B.
Does CNXN pay dividends?
Pc Connection Inc. pays dividends, with $15.3M distributed to shareholders in the trailing twelve months.
Where can I find CNXN SEC filings?
Official SEC filings for Pc Connection Inc. (CIK: 0001050377) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CNXN's EPS?
Pc Connection Inc. has a diluted EPS of $3.27.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CNXN a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Pc Connection Inc. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CNXN stock overvalued or undervalued?
Valuation metrics for CNXN: ROE of 9.2% (sector avg: 22%), net margin of 2.9% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy CNXN stock in 2026?
Our dual AI analysis gives Pc Connection Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CNXN's free cash flow?
Pc Connection Inc.'s operating cash flow is $65.4M, with capital expenditures of $7.4M. FCF margin is 2.0%.
How does CNXN compare to other Technology stocks?
Vs Technology sector averages: Net margin 2.9% (avg: 18%), ROE 9.2% (avg: 22%), current ratio 2.90 (avg: 2.5).