Dj Dir Bowen Gifts 2545 Of Eplus Inc >Plus

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official hinted at a potential interest rate cut in December. John Williams, president of the Federal Reserve Bank of New York, signaled he was open to lowering the fed funds rate—the key interest rate that banks charge each other for overnight loans—to support the job market. Speaking at an event, Williams stated that he sees “room for a further adjustment” for interest rates, which immediately shifted market expectations. Following his remarks, the perceived likelihood of an interest rate cut at the Federal Reserve's December meeting flipped from unlikely to more likely than not. The prospect of lower borrowing costs sent a wave of optimism through the markets, leading to a rally in major indices like the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Electronic Components & Manufacturing company Coherent jumped 4%. Is now the time to buy Coherent? Access our full analysis report here, it’s free for active Edge members.
• Advertising & Marketing Services company Liberty Broadband jumped 4.2%. Is now the time to buy Liberty Broadband? Access our full analysis report here, it’s free for active Edge members.
• Government & Technical Consulting company Maximus jumped 4.1%. Is now the time to buy Maximus? Access our full analysis report here, it’s free for active Edge members.
• Business Process Outsourcing & Consulting company CBIZ jumped 3.7%. Is now the time to buy CBIZ? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company ePlus jumped 3.5%. Is now the time to buy ePlus? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Liberty Broadband (LBRDK)

Liberty Broadband’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Liberty Broadband is down 38.1% since the beginning of the year, and at $47 per share, it is trading 53.6% below its 52-week high of $101.29 from May 2025. Investors who bought $1,000 worth of Liberty Broadband’s shares 5 years ago would now be looking at an investment worth $295.97.

ePlus delivered a strong Q3, with the market responding positively to results that exceeded Wall Street expectations. Management attributed the outperformance to robust demand in security, networking, and cloud solutions, with CEO Mark Marron noting that security gross billings rose 56% year-over-year, fueled by customers investing in AI-driven infrastructure. Additionally, the company saw broad-based growth across customer segments and verticals, except for state and local government, which faced budget constraints. The successful execution of its automation initiatives and operational leverage also played a critical role in the quarter’s margin expansion and profitability.

Is now the time to buy PLUS? Find out in our full research report (it’s free for active Edge members).

ePlus (PLUS) Q3 CY2025 Highlights:

• Revenue: $608.8 million vs analyst estimates of $518.3 million (23.4% year-on-year growth, 17.5% beat)
• Adjusted EPS: $1.53 vs analyst estimates of $0.95 (61.9% beat)
• Adjusted EBITDA: $58.7 billion vs analyst estimates of $38.3 million (9,642% margin, significant beat)
• Operating Margin: 8%, up from 5.7% in the same quarter last year
• Market Capitalization: $2.40 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From ePlus’s Q3 Earnings Call

• Margaret Nolan (William Blair) asked what is driving the strength in security. CEO Mark Marron explained that AI initiatives, including data classification projects, and a general uptick in security-related deals contributed to the strong performance.
• Nolan (William Blair) inquired about variability across end markets. Marron answered that most verticals showed strength except for state and local government, which was impacted by funding constraints, while mid-market and enterprise segments were notably strong.
• Gregory Burns (Sidoti & Company) questioned the sustainability of the pipeline and factors supporting the raised outlook. Marron highlighted robust pipeline tracking, several large deals, and optimism based on current demand trends.
• Burns (Sidoti & Company) sought clarity on operating leverage versus investment needs. Marron responded that operating leverage should continue in the short term but emphasized ongoing investment in organic hires and acquisitions to expand AI and service capabilities.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely watch (1) the pace of customer adoption for AI and cloud solutions, (2) expansion of professional and managed services as recurring revenue drivers, and (3) deployment of capital toward acquisitions or organic growth initiatives. Progress in these areas will be critical to sustaining the company’s current momentum and achieving its strategic objectives.

ePlus currently trades at $89.39, up from $73.42 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).

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As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the it distribution & solutions industry, including ePlus and its peers.

IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.

The 8 it distribution & solutions stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.

While some it distribution & solutions stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results.

Best Q3: ePlus

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

ePlus reported revenues of $608.8 million, up 23.4% year on year. This print exceeded analysts’ expectations by 17.5%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

"Fiscal 2026 is off to a very strong start as the strength from the first quarter carried into the second quarter, with net sales growing 23.4% and diluted EPS increasing almost 63%. This quarter marks an important milestone for ePlus, as we posted quarterly gross billings exceeding $1 billion for the first time in our history. Our second-quarter performance reflects steady progress in executing our strategic priorities as we reported double-digit growth in key financial metrics: revenue, gross profit, net earnings from continuing operations, Adjusted EBITDA and EPS," commented Mark Marron, president and CEO of ePlus.

ePlus pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 20.2% since reporting and currently trades at $88.25.

Is now the time to buy ePlus? Access our full analysis of the earnings results here, it’s free for active Edge members.

TD SYNNEX

Serving as the crucial middleman in the technology supply chain, TD SYNNEX is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.

TD SYNNEX reported revenues of $15.65 billion, up 6.6% year on year, outperforming analysts’ expectations by 3.5%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EPS guidance for next quarter estimates.

The market seems content with the results as the stock is up 3.3% since reporting. It currently trades at $155.34.

Is now the time to buy TD SYNNEX? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Connection

Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.

Connection reported revenues of $709.1 million, down 2.2% year on year, falling short of analysts’ expectations by 4.7%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EPS estimates.

As expected, the stock is down 4.3% since the results and currently trades at $58.18.

Read our full analysis of Connection’s results here.

ScanSource

Operating as a crucial link in the technology supply chain since 1992, ScanSource is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers.

ScanSource reported revenues of $739.7 million, down 4.6% year on year. This number lagged analysts' expectations by 6.1%. Aside from that, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but a significant miss of analysts’ revenue estimates.

ScanSource had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 1.3% since reporting and currently trades at $41.29.

Read our full, actionable report on ScanSource here, it’s free for active Edge members.

CDW

Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.

CDW reported revenues of $5.74 billion, up 4% year on year. This print was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but revenue in line with analysts’ estimates.

The stock is down 7.4% since reporting and currently trades at $143.31.

Read our full, actionable report on CDW here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

IT solutions provider ePlus reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 18.2% year on year to $608.8 million. Its non-GAAP profit of $1.53 per share was 61.9% above analysts’ consensus estimates.

Is now the time to buy PLUS? Find out in our full research report (it’s free for active Edge members).

ePlus (PLUS) Q3 CY2025 Highlights:

• Revenue: $608.8 million vs analyst estimates of $518.3 million (18.2% year-on-year growth, 17.5% beat)
• Adjusted EPS: $1.53 vs analyst estimates of $0.95 (61.9% beat)
• Adjusted EBITDA: $58.7 billion vs analyst estimates of $38.3 million (9,642% margin, significant beat)
• Operating Margin: 8%, in line with the same quarter last year
• Market Capitalization: $2.22 billion

StockStory’s Take

ePlus delivered a strong Q3, with the market responding positively to results that exceeded Wall Street expectations. Management attributed the outperformance to robust demand in security, networking, and cloud solutions, with CEO Mark Marron noting that security gross billings rose 56% year-over-year, fueled by customers investing in AI-driven infrastructure. Additionally, the company saw broad-based growth across customer segments and verticals, except for state and local government, which faced budget constraints. The successful execution of its automation initiatives and operational leverage also played a critical role in the quarter’s margin expansion and profitability.

Looking ahead, ePlus is focused on building momentum through targeted investments in AI, cloud, and security while leveraging its strong cash position to expand both organically and via acquisitions. Management emphasized the opportunity to capitalize on increased customer demand for AI solutions and infrastructure modernization, with Marron stating, "We are well positioned to build on our momentum, capitalize on new opportunities and deliver value to stakeholders over the long term." The company remains committed to enhancing its recurring revenue base through expanded service offerings and strategic hiring, anticipating continued operating leverage in the near term.

Key Insights from Management’s Remarks

Management pointed to the expansion of AI initiatives, ongoing automation, and robust customer demand as key contributors to the quarter’s strong operational and financial performance.

• AI and security drive growth: Management reported strong momentum in security, with gross billings up 56% year-over-year, driven by customer investments in data classification and AI-related projects. This was paired with increased activity in networking as organizations modernize infrastructure to support AI deployments.
• Broad-based customer and vertical strength: Demand was strong across mid-market and enterprise customer segments, with growth observed in nearly all verticals except state and local government, where budget constraints limited spending. Telecom, Media & Entertainment, and SLED (state, local, education) remained significant contributors.
• Automation and operating leverage: Internal automation initiatives led to faster incident resolution and improved customer experience, while operating leverage allowed adjusted EBITDA to grow at twice the rate of net sales. This demonstrates the effectiveness of aligning resources with high-growth areas.
• Expansion via M&A and new offerings: ePlus completed the acquisition of Realwave, a cloud-based AI software platform, enhancing its ability to deliver real-time, AI-driven insights. The company also highlighted ongoing efforts to build out its recurring revenue base in professional and managed services.
• Capital allocation and share repurchase: With more than $400 million in cash, ePlus maintained significant flexibility to invest in growth or return capital to shareholders. The company repurchased 60,000 shares and announced a quarterly dividend, supporting its capital allocation strategy.

Drivers of Future Performance

Management expects future growth to be propelled by expanding AI, cloud, and security offerings, supported by continued operating leverage and disciplined capital deployment.

• Ongoing AI and cloud investments: The company anticipates AI and cloud adoption to accelerate, with customer demand for infrastructure modernization and advanced security solutions expected to remain high. Management’s industry pulse poll underscored that most IT leaders now see AI as a core revenue growth driver.
• Service expansion and recurring revenue: ePlus is investing in professional and managed services to strengthen its recurring revenue streams, targeting both organic hiring and selective acquisitions to add capabilities in key areas.
• Margin expansion and disciplined spending: Management expects operating leverage to persist in the near term, but signals ongoing investment in growth areas. The sale of the domestic financing business has streamlined operations, allowing more resources to be directed toward technology and service expansion.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely watch (1) the pace of customer adoption for AI and cloud solutions, (2) expansion of professional and managed services as recurring revenue drivers, and (3) deployment of capital toward acquisitions or organic growth initiatives. Progress in these areas will be critical to sustaining the company’s current momentum and achieving its strategic objectives.

ePlus currently trades at $84.88, up from $73.42 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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