Remote working, facilitated by digital integration, is expected to dominate the services sector this year as people continue to work from home. Thanks to rising productivity rates and shrinking overhead costs, most companies are adopting a hybrid working model.
Tech stocks are expected to be one of the biggest beneficiaries of changing life- and entertainment styles, with cloud computing and IT solutions being the hottest trends this year. The global IT services market is expected to grow at a CAGR of 11% over the next five years to reach $5.73 trillion.
But because large-cap IT and cloud computing companies are currently on the cusp of market saturation, we think lesser-known tech stocks such as CDW Corporation (CDW – Get Rating), Akamai Technologies, Inc. (AKAM – Get Rating) and Box, Inc. (BOX – Get Rating) will grow significantly in the near future.
Based in Lincolnshire, Illinois, CDW is a provider of integrated information technology (IT) solutions to business, government, education, and healthcare customers in the U.S., Canada and the U.K. The company operates mainly through three segments — Corporate, Public and Other. CDW offers discrete hardware and software products and integrated IT solutions, including mobility, security, data center optimization, cloud computing, virtualization, and collaboration. The company also provides warranties, managed services, and consulting design and implementation services.
The company’s net sales have increased 9.2% year-over-year to $4.96 billion for the fourth quarter, ended December 31, 2020. Its gross profit was reported to be $880.90 million, which represents an improvement of 13.3% year-over-year. CDW’s operating income has increased more than 17% year-over-year to $332.20 million. Its net income was reported to be $238.30 million, up 28.4% year-over-year. And its non-GAAP EPS increased 15.9% year-over-year to $1.82.
A consensus EPS estimate of $1.79 for the quarter ending June 30, 2021 represents an improvement of 14.7% year-over-year. Moreover, CDW has surpassed the consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $19.50 billion for the fiscal 2021 represents a 5.6% rise on a year-over-year basis.
On February 10, the company’s Board of Directors authorized a $1.25 billion increase to the company’s share repurchase program and declared a quarterly cash dividend of $0.40 per common share, payable on March 10. This represents a 5.3% increase over last year’s dividend. Last December, CDW appointed Anthony Foxx to its board of directors, effective January 1. Foxx has held a variety of positions in the public and private sectors and currently serves as the chief policy officer and senior advisor to the president and CEO of Lyft, Inc. (LYFT). CDW stock has gained 25. 7% over the past year and closed Friday’s trading session at $156.89.
CDW’s POWR Ratings reflect this promising outlook. The stock has an A grade for Sentiment and B for Stability and Quality. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
We have also graded CDW for Growth, Momentum and Value. Click here to access all CDW’s ratings.
CDW is ranked #22 out of 80 stocks in the Technology – Services industry.
Headquartered in Cambridge, Massachusetts, AKAM provides cloud services for delivering, optimizing, and securing online content and business applications in the U.S. and internationally. AKAM’s services include the delivery of content, applications and software over the Internet, as well as mobile and security solutions. AKAM’s solutions also include Performance and Security Solutions, Media Delivery Solutions, and Service and Support Solutions. The company sells its solutions through direct sales and service organizations, and various channel partners.
AKAM’s revenue has…
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