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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cdw Corporation (XNAS:CDW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CDW
Name:
CDW CORPORATION (XNAS:CDW)
Sector:
339.50M
Industry:
Information Technology Services
CEO:
Ms. Christine Leahy
Total Employees:
13,900
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 150.97% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CDW CORPORATION(CDW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INFORMATION TECHNOLOGY SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
168.5
One Month Price Target:
$169.57
Six Month Price Target :
$174.91
Likely Price in One Year's Time:
Ticker:
$181.32
Likely Trading Range Today Under (Normal Volatility)
$167.93
Price Upper limit ($) :
$169.27
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$160.49
This week:
$150.58
This month :
$132.67
Other Primary facts
Market Cap:
22.91B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
135.24M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.75%
-14.15%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$205.67
$188.55
$131.33
$148.45
Medium risk (<10%) entry points
Buy Call
Sell Call
$182.98
Buy Put:
Sell Put:
$179.32
$153.98
$157.68
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CDW
Sharpe Ratio:
2.15%
Comparison:
CDW, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 18.48% higher than the industry
& is -5.80% lower than the market/S&P 500 average
Average Returns/Yield of
CDW
Daily returns:
0.06%
Weekly returns:
0.30%
Monthly returns:
1.18%
Yearly returns:
14.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -1.60% below industry average
Classification:
CDW, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
CDW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.34%
Weekly Volatility:
5.24%
Monthly Volatility:
10.48%
Yearly Volatility:
36.32%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.99%
Volatility in last five trading days has been -57.60% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.76%
Weekly VaR:
-10.63%
Monthly VaR:
-21.27%
How Much Can the price of
CDW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-73.67%
This translates to price declining to:
$137.95
This translates to price declining to:
$44.36
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CDW is a 50.10% riskier investment compared to the market/S&P 500 & is 28.59% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -22.73% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CDW
Beta in relation to market/S&P 500--1.13
Expected beta in 1 year's time:
0.759
Expected beta in 3 year's time:
1.073
Unlevered (debt free) Beta:
0.17
Beta in relation to Nasdaq (XNAS):
0.959
Beta in relation to all global stocks::
0.875
Beta Comparison & Analysis
Beta of competitors/peers::
1.218
Beta is -7.10% lower than peers
Average Industry Beta:
1.209
Beta is -6.36% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
80.28%
Sustainable growth rate is -46.06% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.033
Alpha is 9.83% above industry average alpha yield
Alpha is 210% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CDW
Equity cost of capital:
0.109
Equity cost of capital is -4.61% below industry mean WACC
Unlevered (without debt) cost of capital:
1.64%
Before-tax cost of debt:
2.38%
After-tax cost of debt:
1.88%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.88%
WACC is -27.29% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$162.17
Revenue growth rate per share of (3Y):
25.52
Annual revenue growth rate is 115.09% above the industry average
EPS:
$7.24
Expected Annual growth rate of EPS (3Y):
11.49%
Expected future EPS growth rate is 238.72% higher than the Information Technology Services industry
Free cash flow (FCF) per share:
$5.21
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is -418.98% lower than the industry
Debt per share
$49.58
EBITDA per share
$12.78
Valuation Analysis Today of
CDW
P/E Ratio:
24.61
P/E Ratio of Competitors/Peers:
18.81
P/E ratio is 30.82% higher than main peers & is -48.15% lower than the industry
Stock price/value with industry average P/E ratio: $343.67
CDW is -50.97% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $39.28
Present value of the expected future dividends only: $24.86
P/S (Price to Sales ratio):
1.04
Price to sales ratio is -71.55% below the industry mean
P/B (Price to book value ratio):
25.52
Price to free cash flow: 32.35
Price to free cash flow ratio is -0.80% lower than the industry
Net income growth rate (3Y):
67.51%
Net income growth rate is -99.92% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.71%
Dividend yeild: 1.13%
Previous Dividend: $0.50
Previous adjusted dividend: $0.50
Previous Dividend: $1.90
Expected next dividend best case: $0.54
Expected next dividend worst case: $0.46
Average dividend payment (long-term): $0.42
Average dividend increase/decrease (growth rate) % per period: 3.03%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 23/08/2022
-
Previous dividend payment date: 06/10/2022
Previous dividend record date: 25/05/2022
-
Dividend History:
2022-05-24--$0.50
2021-11-23--$0.50
2021-05-24--$0.40
2022-02-24--$0.50
2021-08-24--$0.40
2021-02-24--$0.40
Dividend growth rate is -142.09% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
750.80%
Net debt to equity ratio:
763.77%
Debt to assets ratio:
49.62%
Net debt to assets ratio:
50.48%
Debt-to-asset ratio is -21.80% below industry average
Ability to repay debt:
Interest coverage ratio:
10.09
Interest coverage ratio is -75.86% less than industry average
Looking forward:
Debt growth rate:
54.23%
Annual debt growth is 812% higher than industry average debt growth rate
Debt repayment rate in last quarter: 12.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.81
Statistical significance of correlation:
CDW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.596
Stock price is 35.84% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.596
Correlation of price movement with Nasdaq (^IXIC):
0.03
Covariance of price movement with the market:
0.041
Kurtosis
5.99
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.32
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CDW
Gross Profit Margin Ratio:
71%
Operating Profit Margin Ratio:
6.76%
Operating profit margin is -197.35% lower than the industry
Net Profit Margin Ratio:
71%
Effective Tax Rate:
24.87%
Effective tax rate is -5.80% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
112.66%
Return on equity (ROE) is 100.31% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.45%
Return on assets (ROA) is 8622.26% higher than the industry
Financial Leverage:
2.0x
Current Ratio:
1.26
Current ratio is -45.70% below industry average
Cash Conversion Cycle (days):
17.8
Cash conversion cycle is -52.44% below industry average
The remaining useful life of property plant & equipment is: 3.9 years
Stock based compensation to net income ratio:
2.10%
In-depth Efficiency Analysis
Revenue generated per employee:
1.6M
Each employee generates 273% more revenue than industry average revenue per employee
EBITDA generated per employee:
124.3K
Each employee generates 177% more EBITDA than industry average revenue per employee
Profit generated per employee:
72.4K
Each employee generates 750% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
24.4K
Each employee generates -467% less free cash flow than industry average revenue per employee
Assets/Capital per employee
477.9K
Each employee generates -467% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CDW
DOCUSIGN, INC. (XNAS:DOCU)
VERISIGN, INC. (XNAS:VRSN)
MXIM
TERADYNE, INC. (XNAS:TER)
SKYWORKS SOLUTIONS, INC. (XNAS:SWKS)
ZEBRA TECHNOLOGIES CORPORATION (XNAS:ZBRA)
Garmin Ltd (XNYS:GRMN)
MONGODB, INC. (XNAS:MDB)
SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY (XNAS:STX)
Current Analyst Ratings
Strong buy�21%
Buy�21%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
21.93B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
18.06B
3.88B
-
1.15B
2.39B
-
-
2.39B
-
171.30M
217.40M
1.73B
1.48B
1.01B
1.34B
333.10M
1.01B
Statement of Cash Flow
Date:
Period:
71.40M
Differed Income Tax :
- 5000.00K
Stock Based Compensation :
21.10M
Change in Working Capital :
36.60M
Accounts Receivables:
- 125000.00K
Other Working Capital:
-
Other Non-Cash Items:
6.50M
Net Cash Provided by Operating Activities:
380.80M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
386.90M
-
386.90M
5.06B
1.05B
366.00M
6.87B
359.60M
4.38B
1.58B
-
-
322.30M
6.64B
-
13.51B
3.20B
502.70M
132.70M
443.80M
1.32B
5.46B
6.71B
231.40M
7.16B
-
12.62B
1.40M
- 2408900.00K
- 103100.0K
3.40B
March 31, 2022 at 6:00:00 AM
20.45B
893.10M
13.51B
-
7.21B
6.8B
-
- 41300.00K
- 41300.00K
- 930700.00K
-
-
- 67500.00K
790.10M
- 208100.00K
- 2600.00K
128.80M
386.90M
258.10M
380.80M
- 41300.00K
339.50M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
CDW
2023
2024
2025
2026
2027
$200.96
$216.24
$232.69
$250.39
$269.43