CDW Outlook - A Technical Downturn but Strong Fundamentals

1. Market Snapshot

Headline Takeaway: CDW is showing a weak technical outlook with a score of 3.06 (internal diagnostic score, 0-10), suggesting it is best to avoid for now, despite some underlying fundamental strength.

2. News Highlights

Recent news highlights include:

• Texas Instruments Expansion: A $30B expansion in Sherman, Texas, is gaining attention. This could indirectly benefit CDW if the technology supply chain experiences renewed demand.
• Analyst Conference Appearance: Texas Instruments participated in the Bernstein Conference, outlining its growth strategies and capacity plans, which could have ripple effects on the tech sector as a whole.
• Apple Logic Pro Update: Apple’s new Logic Pro features are likely to increase demand for Mac and iPad-based workflows, potentially favoring tech companies like CDW with related solutions.

3. Analyst Views & Fundamentals

Analysts are split in their views, with UBS recommending a “Strong Buy” and Barclays issuing a “Neutral” rating. The simple average rating is 4.00, while the performance-weighted rating is 4.76. This shows a generally optimistic outlook but with some dispersion in expectations. The current price trend is negative (-0.29%), which does not align well with the weighted expectations.

On the fundamental front, CDW is performing well in several key areas:

• ROE (diluted): 20.11%, scoring 7.59 (internal diagnostic score, 0-10).
• Net profit margin: 4.44%, scoring 7.59 (internal diagnostic score, 0-10).
• Annualized return on equity: 41.17%, scoring 7.59 (internal diagnostic score, 0-10).
• Price-to-sales (PS) ratio: 4.80, scoring 7.59 (internal diagnostic score, 0-10).
• Total profit (YoY growth rate): 1.92%, scoring 7.59 (internal diagnostic score, 0-10).

However, some key metrics like the Shareholders' equity attributable to parent company / Total liabilities (%) are weak at 0.19%, scoring 0 (internal diagnostic score, 0-10), which suggests some leverage risk.

4. Money-Flow Trends

Big-money investors appear more optimistic than retail traders. The overall inflow ratio is at 55.04%, with extra-large inflow ratio at 60.00%, both trending positive. In contrast, medium and large inflow ratios are at 49.43% and 47.40%, respectively, showing mixed signals.

Big-money flows are positive at 55.71%, while small-money flows are at 50.63%, suggesting that institutional investors are more active than average retail traders in buying CDW.

5. Key Technical Signals

From a technical standpoint, CDW is facing headwinds. Three out of four recent indicators are bearish or neutral, with the technical score at 3.06 (internal diagnostic score, 0-10), signaling a weak trend and a suggestion to avoid the stock for now.

• WR Overbought: Score 6.57 (internal diagnostic score, 0-10). This indicator suggests some strength, but it is not enough to counter the bearish momentum.
• Bearish Engulfing: Score 1.00 (internal diagnostic score, 0-10). A very weak signal that reinforces the negative trend.
• Dividend Payable Date: Score 1.00 (internal diagnostic score, 0-10). This event historically correlates with negative price movement.
• Hanging Man: Score 3.69 (internal diagnostic score, 0-10). A neutral-to-bearish reversal pattern.

On September 11, 2025, the Bearish Engulfing pattern was observed, a significant bearish signal. Earlier in the week, on September 10, the WR Overbought and Dividend Payable Date signals emerged, reinforcing the bearish tone. These signals suggest a lack of momentum and a potential reversal in the short term.

6. Conclusion

CDW has strong fundamentals with solid returns on equity and profit margins. However, the recent technical signals, including a Bearish Engulfing and Dividend Payable Date, are concerning and suggest a short-term pullback. With a fundamental score of 7.59 and a technical score of 3.06, there is a clear disconnect between fundamentals and technicals.

Actionable Takeaway: Consider waiting for a pull-back or clearer bullish signals before entering a position. Monitor the upcoming technical and market data for further confirmation of a reversal in the trend.