Earnings To Watch: Insight Enterprises (NSIT) Reports Q1 Results Tomorrow
15min read Insight Enterprises (NASDAQ: NSIT), a leading global IT solutions provider, is set to release its Q1 2025 earnings results tomorrow, May 1, 2025. Investors will scrutinize the report for signs of stabilization amid macroeconomic headwinds and shifting demand dynamics. With consensus estimates pointing to a challenging quarter, the results could influence the stock’s valuation trajectory and its long-term growth narrative. Here’s what to watch.
Ask Aime: What's in store for Insight Enterprises' Q1 2025 earnings tomorrow?
Key Metrics: A Mixed Q1 Outlook
Analysts expect Q1 2025 EPS of $2.01, down 15.2% year-over-year (YoY) from $2.37 in Q1 2024. This marks the third consecutive quarter of EPS declines, reflecting persistent pressure on product sales and rising operating expenses. Revenue is projected to fall 7.8% YoY to $2.19 billion, with the company navigating a challenging IT hardware market.
The estimates have trended lower in recent weeks, with the consensus dropping from $2.04 to $2.01 over the past 30 days. This downward revision underscores concerns about softness in the product segment, which has historically been a key revenue driver. Meanwhile, Insight’s services division—focusing on cloud solutions and IT managed services—has shown resilience, growing 21% and 15% in 2024, respectively. Investors will look for signs that these high-margin services (contributing to a record 21.2% gross margin in Q4 2024) can offset product headwinds.
Analyst Sentiment and Valuation Clues
Despite near-term challenges, Insight’s long-term prospects appear brighter. Analysts project 8.7% EPS growth in 2026, driven by strategic shifts toward services and margin expansion. The stock’s average 12-month price target of $180.62 implies a 35% upside from its April 2025 price of ~$133, suggesting optimism about a recovery.
Ask Aime: "Will Insight's Q1 earnings reveal a turnaround in the IT hardware market?"
However, current sentiment is cautious. The Zacks Earnings ESP model predicts a -3.20% surprise probability, indicating a higher risk of missing estimates, while the Zacks Rank #4 (“Sell”) reflects short-term skepticism. This contrasts with Q4 2024, when the company beat EPS estimates by +5.14%, a positive anomaly in an otherwise tough year.
Risks and Opportunities
The Q1 report will hinge on two critical factors:
1. Services Growth Momentum: Investors will analyze whether services revenue continues to outpace product declines. A sustained 20%+ growth rate in cloud and IT services could validate the company’s strategic pivot.
2. Margin Sustainability: Gross margins have held at ~20% in recent quarters, but rising operating expenses (+9% in 2024) threaten profitability. Cost discipline will be key to meeting EPS targets.
Conclusion
Insight Enterprises’ Q1 results will serve as a litmus test for its ability to navigate a challenging IT market while capitalizing on high-margin services. While near-term estimates are conservative, the stock’s 35% upside target and long-term growth projections highlight the potential rewards for investors willing to bet on a recovery.
A beat on the $2.01 EPS or evidence of services-driven margin resilience could spark a rally, while a miss might amplify concerns about the company’s execution. With $2.19 billion in revenue expected, the focus will be on whether Insight can stabilize its core business while positioning itself for stronger growth in 2026. The earnings call on May 1 will be critical—listen for clarity on gross margin trends, cost controls, and the outlook for services. For now, the path to the $180 price target runs through tomorrow’s results.
