📊 CNXN Key Takeaways
Investment Thesis
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.
CNXN 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
CNXN 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
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
CNXN Financial Metrics
💡 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 Profitability Ratios
CNXN vs Technology Sector
How PC CONNECTION INC compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CNXN Balance Sheet & Liquidity
CNXN 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 Growth Metrics (YoY)
CNXN Quarterly 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.
CNXN Capital Allocation
CNXN SEC Filings
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 an AI rating of HOLD with 62% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CNXN's 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.
What are the risks of investing in CNXN?
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.
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?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.