Key insights
- The author believes CDW is undervalued due to AI fears, arguing that human IT support remains crucial for businesses and schools. Upcoming Q1 earnings and analyst growth estimates are key. The author highlights CDW's double-digit ROE/ROIC and low P/E ratios as positive indicators, suggesting potential upside if earnings meet expectations.
in looking at downtrodden stocks I found CDW, one of the largest IT providers for business and schools, consulting and selling them laptops, servers, cloud, security, networking stuff, software needs, data storage, IT help etc. seems like they're one of the stocks taken down by fears of AI will replace them. maybe these fears are warranted but I think they'll be okay. its one thing to say just use AI, but for education and businesses these are serious needs and having an employee ask a LLM what to do isn't gonna fly. and it puts all the fault on them. plus if you search CDW on reddit its mostly zero stock discussion and actual IT people talking about getting deals from their reps who are actually helpful. I don't think a LLM telling a business or school to just buy 300 Lenovo Chromebooks and download Norton is gonna be the future. Their q1 earnings is coming out next week, analysts still estimating growth but we'll see.
double digit ROE, ROIC. PE of 16, F PE 13.