Wrapping up Q2 earnings, we look at the numbers and key takeaways for the it distribution & solutions stocks, including Ingram Micro (NYSE:INGM) 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 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 3.6% on average since the latest earnings results.
Ingram Micro (NYSE:INGM)
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE:INGM) 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 print exceeded analysts’ expectations by 6.4%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates and revenue guidance for next quarter slightly missing analysts’ expectations.
Interestingly, the stock is up 2.8% since reporting and currently trades at $19.37.
Read our full report on Ingram Micro here, it’s free.
Best Q2: ePlus (NASDAQ:PLUS)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) 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, outperforming analysts’ expectations by 23.3%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
ePlus achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 13.8% since reporting. It currently trades at $72.23.
Is now the time to buy ePlus? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Insight Enterprises (NASDAQ:NSIT)
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ:NSIT) 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 8.9% since the results and currently trades at $131.86.
Read our full analysis of Insight Enterprises’s results here.
Avnet (NASDAQ:AVT)
With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) 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 beat analysts’ expectations by 4.5%. Aside from that, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but a significant miss of analysts’ EPS guidance for next quarter estimates.
The stock is up 3.1% since reporting and currently trades at $53.51.
Read our full, actionable report on Avnet here, it’s free.
Connection (NASDAQ:CNXN)
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) 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 $759.7 million, up 3.2% year on year. This number lagged analysts' expectations by 0.6%. Taking a step back, it was still a satisfactory quarter as it put up a beat of analysts’ EPS estimates.
The stock is down 1.3% since reporting and currently trades at $63.15.
Read our full, actionable report on Connection here, it’s free.
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.
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