CDW Corporation
A scaled integrator turning IT complexity into steady cash flow
CDW is a dominant IT solutions aggregator that sits between 1,000+ technology vendors and 250,000+ enterprise, public sector and SMB customers, solving procurement, design, integration and lifecycle management across hardware, software, cloud and services.
Scale, channel breadth, partner certifications and a growing services engine make the business resilient and cash generative. Recent filings show durability through a mixed IT cycle: Q3 2025 net sales rose 4% with gross margin at 21.9%, while year‑to‑date operating cash flow reached $771 million and free cash flow $692 million.
Trailing twelve‑month free cash flow to September 30, 2025 is about $1.01 billion, after adding Q4 2024 cash flows. Leverage is manageable with roughly $5.2 billion net debt and ample liquidity, and the dividend policy targets about 25% of TTM non‑GAAP net income.
The strategy continues to tilt toward higher‑value services, reinforced by acquisitions such as Mission Cloud (AWS Premier Tier) and deepening alliances with Microsoft and AWS. We view CDW as a high‑quality operator with a narrow‑to‑moderate moat from customer stickiness, vendor relationships and scale economics.
Pricing power is better in services than in product resell, and working‑capital swings can mask intrinsic cash generation. With risk‑free rates near 4.2% and mid‑single‑digit growth, a mid‑ to high‑teens multiple of TTM free cash flow is a reasonable anchor for fair value.
CDW a-t-elle un rempart concurrentiel (moat) solide ?
CDW’s moat derives from a combination of switching costs, scale economics, and partner credentials rather than a pure network effect. Customers embed CDW in procurement, architecture, integration, financing and lifecycle management, creating relationship depth that is hard to replicate at scale.
The firm serves over 250,000 customers with approximately 10,900 customer‑facing coworkers, offering multi‑vendor solutions across the stack. On the vendor side, CDW is a top channel partner for major OEMs, software publishers and cloud providers, earning premier designations with AWS and comprehensive Microsoft Cloud Partner designations.
These recognitions both validate capabilities and funnel opportunity. Strength and durability by moat component: switching costs 85/100 (embedded account management, services and financing); cost advantage 80/100 (scale buying power, logistics, configuration centers); intangible assets 70/100 (brand, certifications); efficient scale 75/100 (U.S.
IT VAR market remains fragmented with a few large integrators); network effects 35/100 (some partner flywheel, but not a classic user network). Risks to durability include vendor disintermediation by hyperscalers, direct SaaS sales, and large private peers (WWT, SHI) or public peers (NSIT, PLUS) competing aggressively.
The company’s pivot toward services (Amplified Services, Digital Velocity and Mission Cloud) increases stickiness and should modestly strengthen the moat over time.
CDW a-t-elle un pricing power dans son secteur ?
As a multi‑brand integrator, CDW’s core hardware and software resale has limited unilateral pricing power and must remain competitive. However, services, managed offerings and cloud marketplace solutions carry higher rates and better control over pricing.
Gross margin has been steady in the 21–22% zone with quarterly variations driven by mix; in Q3 2025 gross margin was 21.9% helped by services and netted‑down cloud revenues. We see latent pricing power mainly in services as the mix grows, but we do not assume outsized rate expansion.
Quelle est la prévisibilité de l'activité de CDW ?
CDW’s demand is diversified across Corporate, Small Business and Public, plus UK/Canada, which smooths cycles. Recurring‑like elements (maintenance, managed services, SaaS, cloud marketplace) improve visibility, though product cycles and budget timing still introduce variability.
Q3 2025 net sales rose 4% year over year, and the company continues to target U.S. IT market outperformance by 200–300 bps. The 2025 Windows 10 end‑of‑support created a temporary boost in client devices that should fade, but services and security workloads should provide steadier growth.
Overall, we view mid‑single‑digit organic growth with modest volatility as a fair baseline.
CDW est-elle financièrement solide ?
Balance sheet strength is solid for a distributor‑integrator: as of 9/30/2025 total debt was about $5.63 billion, cash $453 million, and net debt around $5.18 billion with cash plus revolver availability near $1.8 billion.
Interest coverage remains healthy, and management’s liquidity discipline is shown in a cash conversion cycle running near the low end of their target range, although DSO ticked higher to 92 days in Q3 2025. We estimate TTM free cash flow at roughly $1.01 billion to 9/30/2025 by adding Q4 2024 FCF ($345.3m CFO minus $28.6m capex) to 2025 YTD FCF ($771.4m CFO minus $79.2m capex), supporting rapid deleveraging if needed.
Key watch‑items are working‑capital swings and cyclical public‑sector spending.
Quelle est l'efficacité de la stratégie d'allocation de capital de CDW ?
Management has a long record of balanced allocation: reinvest in capacity and services, augment via targeted M&A, and return capital through buybacks and a growing dividend. Strategic deals such as Sirius (2021) and Mission Cloud (2024) expanded solutions depth, particularly in cloud, security and managed services.
In 2025 the Board increased the repurchase authorization and lifted the dividend to $0.63, aligned with a 25% TTM non‑GAAP EPS payout target. We like the services‑led M&A posture and measured leverage.
One caution in 2025: capital returned YTD ran above free cash flow due to timing, something we prefer to see normalize as cash conversion improves.
CDW a-t-elle une direction de haute qualité ?
CEO Christine Leahy and CFO Albert Miralles have steered the company through a complex cycle while maintaining operational discipline, partner expansion, and a consistent shareholder‑return framework.
Execution shows in steady gross margins, controlled operating costs over the long run, and repeatable working‑capital management despite 2025 DSO pressure. Communication of financial guardrails and a simple capital‑return formula inspire confidence.
Continued progress in cloud and AI services with AWS and Microsoft further reflects strategic clarity.
CDW est-elle une entreprise de qualité ?
CDW Corporation est une entreprise de qualité a good avec un score de qualité de 77/100
- Scaled, partner‑rich model with 250k+ customers and 1,000+ vendor relationships provides breadth and switching friction, especially when paired with growing services and managed offerings.
- TTM free cash flow to 9/30/2025 is about $1.01 billion; FCF remains resilient through cycles though working capital can be volatile.
- Leverage sits around the mid‑2x area on EBITDA with net debt near $5.2 billion and strong liquidity; capital returns continue with an 11/2025 dividend increase to $0.63 per quarter.
- Mix shift tailwinds: services and netted‑down cloud/SaaS revenues gaining share; Mission Cloud acquisition deepens AWS and AI execution.
- Secular PC refresh from Windows 10 end‑of‑support supported 2025 endpoint demand, but this tailwind will normalize in 2026.
Quelle est le prix juste de l'action CDW ?
CDW est-elle un bon investissement à $132 ?
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