Press Release: Cdw To Participate In The Citi 2025 Global Tmt Conference

Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. But increasing competition from AI-driven upstarts has tempered enthusiasm, and over the past six months, the industry has pulled back by 4.1%. This performance was discouraging since the S&P 500 returned 5.2%.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one services stock poised to generate sustainable market-beating returns and two best left ignored.

Two Business Services Stocks to Sell:

ABM (ABM)

Market Cap: $3.00 billion

With roots dating back to 1909 as a window washing company, ABM Industries provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Why Should You Sell ABM?

• Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
• Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
• Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.3 percentage points

At $48.14 per share, ABM trades at 12.4x forward P/E. To fully understand why you should be careful with ABM, check out our full research report (it’s free).

CDW (CDW)

Market Cap: $21.46 billion

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.

Why Is CDW Risky?

• Annual sales declines of 1.1% for the past two years show its products and services struggled to connect with the market during this cycle
• Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
• Flat earnings per share over the last two years underperformed the sector average

CDW is trading at $163.49 per share, or 16.4x forward P/E. Check out our free in-depth research report to learn more about why CDW doesn’t pass our bar.

One Business Services Stock to Buy:

QuinStreet (QNST)

Market Cap: $839.5 million

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

Why Will QNST Outperform?

• Market share has increased this cycle as its 37.2% annual revenue growth over the last two years was exceptional
• Projected revenue growth of 7.5% for the next 12 months suggests its momentum from the last two years will persist
• Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 160% annually

QuinStreet’s stock price of $14.74 implies a valuation ratio of 13.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at it distribution & solutions stocks, starting with ePlus .

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 7 it distribution & solutions stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 6.2% while next quarter’s revenue guidance was 0.5% below.

In light of this news, share prices of the companies have held steady as they are up 4.5% on average since the latest earnings results.

Best Q2: 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 $637.3 million, up 19% year on year. This print exceeded analysts’ expectations by 23.3%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates.

"Fiscal 2026 is off to a strong start both financially and strategically. We reported double digit growth across key financial metrics, including revenue, gross profit, and earnings per share. Our services business continues to be a standout, increasing nearly 50% in the quarter," commented Mark Marron, president and CEO of ePlus.

ePlus achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 16.1% since reporting and currently trades at $73.68.

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

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 $5.98 billion, up 10.2% year on year, outperforming analysts’ expectations by 7.8%. The business had a very strong quarter with a beat of analysts’ EPS estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $164.45.

Is now the time to buy CDW? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Insight Enterprises

With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.

Insight Enterprises reported revenues of $2.09 billion, down 3.2% year on year, falling short of analysts’ expectations by 2.4%. It was a slower quarter as it posted a miss of analysts’ EPS estimates.

Insight Enterprises delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 8.4% since the results and currently trades at $132.64.

Read our full analysis of Insight Enterprises’s results here.

Ingram Micro

Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.

Ingram Micro reported revenues of $12.79 billion, up 10.9% year on year. This result beat analysts’ expectations by 6.4%. Taking a step back, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates and revenue guidance for next quarter slightly missing analysts’ expectations.

The stock is up 3.5% since reporting and currently trades at $19.49.

Read our full, actionable report on Ingram Micro here, it’s free.

Avnet

With a century-long history of adapting to technological evolution, Avnet is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.

Avnet reported revenues of $5.62 billion, flat year on year. This print topped analysts’ expectations by 4.5%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ EPS guidance for next quarter estimates.

The stock is up 4.3% since reporting and currently trades at $54.11.

Read our full, actionable report on Avnet here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

CDW’s second quarter results reflected positive sales momentum and exceeded Wall Street revenue and profit expectations, yet the market reacted negatively. Management attributed the quarter’s growth to strong demand for hardware upgrades, particularly client devices, and infrastructure projects, bolstered by the Windows 10 end-of-life cycle. CEO Christine Leahy highlighted that commercial and healthcare channels were standouts, with corporate net sales up 18% and healthcare up 24%, offsetting declines in education and federal government segments. Leahy noted, “Our balanced portfolio of diverse customer end markets, breadth of offerings, and disciplined execution enabled us to capture opportunities despite persistent funding shifts and policy headwinds, particularly in education.”

Is now the time to buy CDW? Find out in our full research report (it’s free).

CDW (CDW) Q2 CY2025 Highlights:

• Revenue: $5.98 billion vs analyst estimates of $5.55 billion (10.2% year-on-year growth, 7.8% beat)
• Adjusted EPS: $2.60 vs analyst estimates of $2.49 (4.4% beat)
• Adjusted EBITDA: $555.1 million vs analyst estimates of $539.6 million (9.3% margin, 2.9% beat)
• Operating Margin: 7%, in line with the same quarter last year
• Market Capitalization: $21.5 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 CDW’s Q2 Earnings Call

• Erik Woodring (Morgan Stanley) asked if CDW’s recent outperformance signals share gains above its 200–300 basis point target. CEO Christine Leahy responded that the company’s growth continues to deliver a premium to market benchmarks, particularly on customer spend.
• David Vogt (UBS) inquired about the drivers behind strong corporate demand and the lack of pull-forward in results. Leahy cited pent-up enterprise IT project demand and strong execution in large deals, while CFO Al Miralles noted the impact of product mix on margins.
• Amit Daryanani (Evercore ISI) questioned the rationale for guiding to slower growth in the second half. Leahy explained that ongoing education and federal funding uncertainties drove a cautious outlook, anticipating customers would pause spending until greater clarity emerges.
• Asiya Merchant (Citigroup) asked about the drivers behind margin pressure and whether competitive pricing was a factor. Miralles clarified that margin dilution stemmed mainly from product and customer mix shifts, with no significant pricing pressure observed.
• Ruplu Bhattacharya (Bank of America) probed the extent of AI-driven demand in hardware and data center sales. Leahy noted that AI conversations are accelerating, particularly in consulting and infrastructure, but the company is in early innings regarding AI PC adoption.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will monitor (1) the pace of recovery in public sector markets, especially as funding protocols and stimulus transitions play out; (2) customer adoption of new AI and managed services offerings, gauging their impact on revenue mix and margins; and (3) the balance between hardware refresh demand and potential macroeconomic slowdowns. Execution on service expansion and resilience in commercial and healthcare channels will also be critical to watch.

CDW currently trades at $164, in line with $165.14 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

Our Favorite Stocks Right Now

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

IT solutions provider CDW (NASDAQGS:CDW) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.2% year on year to $5.98 billion. Its non-GAAP profit of $2.60 per share was 4.4% above analysts’ consensus estimates.

Is now the time to buy CDW? Find out in our full research report (it’s free).

CDW (CDW) Q2 CY2025 Highlights:

• Revenue: $5.98 billion vs analyst estimates of $5.55 billion (10.2% year-on-year growth, 7.8% beat)
• Adjusted EPS: $2.60 vs analyst estimates of $2.49 (4.4% beat)
• Adjusted EBITDA: $555.1 million vs analyst estimates of $539.6 million (9.3% margin, 2.9% beat)
• Operating Margin: 7%, in line with the same quarter last year
• Market Capitalization: $20.99 billion

StockStory’s Take

CDW’s second quarter results reflected positive sales momentum and exceeded Wall Street revenue and profit expectations, yet the market reacted negatively. Management attributed the quarter’s growth to strong demand for hardware upgrades, particularly client devices, and infrastructure projects, bolstered by the Windows 10 end-of-life cycle. CEO Christine Leahy highlighted that commercial and healthcare channels were standouts, with corporate net sales up 18% and healthcare up 24%, offsetting declines in education and federal government segments. Leahy noted, “Our balanced portfolio of diverse customer end markets, breadth of offerings, and disciplined execution enabled us to capture opportunities despite persistent funding shifts and policy headwinds, particularly in education.”

Looking ahead, CDW’s outlook is shaped by ongoing caution in public sector markets and continued investments in its services and AI capabilities. Management expects government and education headwinds to persist, with state and local funding instability and changing protocols impacting demand. CFO Al Miralles emphasized that the company is maintaining a prudent approach, stating, “We are holding our full year 2025 view of low single-digit growth for the IT market” and remain focused on expense discipline and capital allocation. Leahy added that CDW’s strategy is to leverage its full-stack solutions, especially in consulting and managed services, to help customers navigate complexity and accelerate adoption of AI and digital transformation initiatives.

Key Insights from Management’s Remarks

Management credited the quarter’s performance to robust hardware refresh cycles, strong execution in commercial and healthcare segments, and increased customer focus on mission-critical projects, while acknowledging public sector softness and changing customer funding dynamics.

• Commercial strength offset declines: Robust demand in corporate and small business segments drove high double-digit growth, as customers prioritized hardware upgrades and productivity-related IT investments. Management cited pent-up enterprise demand and successful execution in large-scale deals as key factors.
• Healthcare outperformed other verticals: The healthcare channel delivered 24% net sales growth, fueled by customers addressing clinical continuity and critical infrastructure needs, helping offset anticipated declines in education and federal segments.
• Public sector weakness persisted: Education sales declined 11% due to changes in federal funding and stimulus expiration, while federal government demand softened amid shifting policies and budget priorities. State and local government spending showed resilience but could not fully compensate for federal and K-12 headwinds.
• Services and cloud momentum: Services revenue increased 8%, with double-digit growth in professional and managed offerings. Cloud and software spend rose sharply, supported by strong customer demand for security, productivity, and data management solutions.
• AI solutions driving engagement: The company’s AI Center of Excellence is seeing growing customer interest, with projects ranging from IT workflow automation to large-scale managed security engagements. Management highlighted these investments as differentiators that deepen customer relationships and drive incremental growth.

Drivers of Future Performance

CDW expects continued macro uncertainty and public sector funding volatility to shape near-term growth, while investments in services, AI, and customer-centric solutions remain central to its strategy.

• Public sector headwinds: Ongoing instability in education and government funding, including the expiration of stimulus and shifting federal priorities, is expected to limit growth in these channels. Management is cautious, anticipating an unseasonal softness in the back half of the year as customers reassess budgets.
• Services and AI expansion: Management views its services-led business—including advisory, managed, and AI solutions—as a key growth engine. Recent hires and expanded capabilities in these areas are intended to accelerate adoption and support higher-margin opportunities, with the expectation that customer demand for digital transformation will continue to rise.
• Balanced portfolio as a buffer: CDW’s diversified mix across commercial, healthcare, and international markets is expected to provide resilience against sector-specific downturns. Management believes this breadth will help offset ongoing headwinds in public sector segments and enable continued market share gains.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will monitor (1) the pace of recovery in public sector markets, especially as funding protocols and stimulus transitions play out; (2) customer adoption of new AI and managed services offerings, gauging their impact on revenue mix and margins; and (3) the balance between hardware refresh demand and potential macroeconomic slowdowns. Execution on service expansion and resilience in commercial and healthcare channels will also be critical to watch.

CDW currently trades at $160.15, down from $165.14 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

Stocks That Trumped Tariffs

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.