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Investing.com - BofA Securities has reduced its price target on CDW Corporation (NASDAQ:CDW) to $170.00 from $200.00 while maintaining a Neutral rating on the stock. Currently trading at $141.64, CDW sits just above its 52-week low of $137.31, with shares down 15% year-to-date. According to InvestingPro data, the company appears undervalued compared to its Fair Value.
The technology solutions provider reported third-quarter revenue slightly below BofA’s estimates, with implied fourth-quarter revenue guidance also coming in lower than anticipated. Despite these misses, CDW’s gross profit dollars grew 5% year-over-year in the third quarter, exceeding management’s guidance for low-single-digit growth. The company’s overall revenue grew 6.1% over the last twelve months, though its gross profit margin remains relatively weak at 21.6%.
CDW maintained its full-year 2025 revenue, gross profit, and earnings per share guidance unchanged. However, the company revised its free cash flow guidance to the lower end of 80-90% of non-GAAP net income, citing higher working capital requirements. Despite market challenges, CDW has maintained dividend payments for 13 consecutive years, currently offering a 1.7% yield.
BofA highlighted strong performance in CDW’s small and medium-sized business channel, which grew revenues 14% year-over-year, marking its fourth consecutive quarter of growth. The company also saw high-single-digit growth in its Healthcare and UK segments.
The investment bank cited ongoing challenges including an uncertain spending environment, impacts from the U.S. government shutdown affecting federal revenue, and weakness in the K-12 education sector as factors in its decision to maintain a Neutral rating. InvestingPro data reveals that 7 analysts have revised their earnings downwards for the upcoming period, though the consensus price target still suggests 31% upside potential. For comprehensive analysis including 10+ additional ProTips and a detailed Pro Research Report on CDW, visit InvestingPro.
In other recent news, CDW Corp reported its third-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $2.71, outperforming the forecasted $2.62. This positive earnings surprise highlights the company’s strong financial performance in the recent quarter. However, despite the favorable earnings results, the company’s stock experienced a decline, which is attributed to broader market conditions and investor concerns about potential future challenges. These developments come as part of CDW’s ongoing financial updates. The earnings report provides a crucial insight into the company’s recent financial health, offering investors a detailed look at its performance. Analysts and investors will likely continue to monitor CDW’s progress closely in the coming quarters.
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