Information technology products reseller and services provider CDW (CDW) on Wednesday handily beat analyst estimates for the fourth quarter. But CDW stock fell on the company’s conservative outlook.


The Lincolnshire, Ill.-based company earned an adjusted $2.08 a share on sales of $5.54 billion in the December quarter. Analysts had expected CDW earnings of $1.97 a share on sales of $5.24 billion, according to FactSet. On a year-over-year basis, CDW earnings rose 14% while sales climbed 12%.

“Our strong fourth-quarter and full-year performance demonstrated the power of our business model with balance across customer end markets and our product and solutions portfolio, and reinforced the strength of our strategy,” Chief Executive Christine Leahy said in a news release.

CDW provides multibrand IT solutions to business, government, education and health-care customers in the U.S., U.K. and Canada.

CDW Stock Drops On Guidance

But CDW’s guidance for the year ahead was “exceptionally conservative,” said Evercore ISI analyst Amit Daryanani. However, the outlook was prudent given a volatile supply situation, he said in a note to clients.

Daryanani reiterated his outperform rating on CDW stock with a price target of 250.

On the stock market today, CDW stock slid 2.5% to close at 189.96. During the regular session Monday, CDW stock advanced 1.8% to 194.76.

CDW stock ranks third out of 53 stocks in IBD’s Computer-Tech Services industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 90 out of 99. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

On Dec. 23, CDW stock broke out of a cup-with-handle base at a buy point of 200.63, according to IBD MarketSmith charts. It notched a record high of 208.71 on Jan. 4 before falling during the stock market correction.

CDW stock is on the IBD 50 list of top-performing growth stocks.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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