CDW Corporation (CDW) is an American multinational IT solutions provider based in Illinois. It serves business, government, healthcare, and education customers. CDW is a Fortune 500 company and a member of the S&P 500 Index.
CDW has recently acquired Sirius Computer Solutions, a leading provider of technology-driven mission-critical solutions. It counts on the acquisition to enhance its capabilities in key growth areas, such as hybrid infrastructure and cloud and managed services. CDW borrowed $2.5 billion through a sale of senior notes to fund the acquisition.
For Q3 2021, CDW’s earnings report shows revenue jumped 11.4% year-over-year to $5.3 billion, slightly missing the consensus estimate of $5.35 billion. It posted adjusted EPS of $2.13, which rose from $1.83 in the same quarter last year and beat the consensus estimate of $2.06.
Since its June 2013 IPO, CDW has increased its dividend for eight consecutive years. CDW stock currently offers a dividend yield of 0.82%.
With this in mind, we used TipRanks to take a look at the risk factors for CDW Corporation.
Risk Factors
According to the new TipRanks Risk Factors tool, CDW Corporation’s main risk category is Finance and Corporate, representing 42% of the total 31 risks identified for the stock. Production and Macro and Political are the next two major risk categories at 16% and 13% of the total risks, respectively. CDW has recently updated its profile with one new Finance and Corporate risk factor.
It tells investors that it may face challenges integrating Sirius into its existing business. It mentions that there may be surprise costs and liabilities in the integration process. As a result, CDW cautions that it may not fully achieve the anticipated benefits of the acquisition. It goes on to warn that failure to realize the expected cost and revenue synergies of the Sirius acquisition could harm its operating results, cash flow, and stock price.
The Finance and Corporate risk factor’s sector average is 40% versus CDW’s 42%. CDW’s stock has gained about 55% year-to-date.
Analysts’ Take
Stifel Nicolaus analyst Matthew Sheerin recently reiterated a Hold rating on CDW Corporation stock and raised the price target to $200 from $190. Sheerin’s new price target suggests 1.95% downside potential.
Consensus among analysts is a Moderate Buy based on 2 Buys and 3 Holds. The average CDW Corporation price target of $212 implies 3.94% upside potential to current levels.
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