What's In Store For CDW Corporation (CDW) In Q1 Earnings?

CDW Corporation (NASDAQ:CDW) is set to report first-quarter 2017 results on May 3. Last quarter, the company posted a positive earnings surprise of 6.58%. Notably, the stock outperformed the Zacks Consensus Estimate in all the trailing four quarters with an average positive surprise of 5.85%.

Let us see how things are shaping up for this announcement.

Factors at Play

CDW specializes in offering information technology products and services to business, government, education and healthcare customers, primarily in the U.S. and Canada.

Growth in customer channels and consistent strategic achievements are a couple of positive factors which are anticipated to drive the company’s performance in the soon-to-be reported quarter. Additionally, CDW’s robust product portfolio and product refreshes are positives.

The company’s exposure in the high-end corporate desktop and digital education implementation space is encouraging. Moreover, CDW’s focus on small & medium businesses and customer additions help in expanding its market share.

However, a highly-leveraged balance sheet, competition from Insight Enterprises Inc. (NASDAQ:NSIT) and PC Connection, Inc., and pricing pressure remain headwinds.

Earnings Whispers

Our proven model does not conclusively show that CDW will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP for CDW is 1.41%. This is because the Most Accurate estimate of 72 cents is higher than the Zacks Consensus Estimate by a penny. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CDW carries a Zacks Rank #4 (Sell). Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

AMTEK Inc. (NYSE:AME) , with an Earnings ESP of +1.79% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple Inc. (NASDAQ:AAPL) , with an Earnings ESP of +1.00%, and a Zacks Rank #3.

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