Value
6.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.2 |
| P/S | 9.9 |
| EV/EBITDA | 4.9 |
| Fwd P/E | 7.3 |
| PEG | 4.6 |
- ▸Forward P/E: 17.1x
- ▸PEG: 1.95
CNXN · Why this verdict
Why PC Connection (CNXN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality notes flag no meaningful competitive moat, with the moat component scoring in the low range, indicating the business lacks durable pricing power or structural barriers to competition in electronics distribution. Quality | EPS growth rate exceeding 15% year over year for 4 consecutive quarters would suggest the business has moved beyond commodity-margin distribution and is capturing scale or share advantages. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 and an FCF quality score of 8 out of 10 indicate financial discipline that can partially compensate for the absence of a structural moat. | ||
Management has beaten consensus estimates in three of the last four quarters, with the most recent print delivering a 24% upside surprise, suggesting the company tends to guide conservatively and set expectations that it can clear. Earnings | Average quarterly EPS surprise stays above 5% over the next four quarters. | →Stable |
| CounterThe one miss in the streak — a -3.5% shortfall two quarters ago — shows the run is imperfect, and with sluggish underlying revenue growth the cushion for continued beats may be limited. | ||
With only 3.3% headroom to the take-profit level and a reward-to-risk ratio of 0.47-to-1, the near-term geometry offers materially more downside exposure than upside opportunity, and the asymmetry gate has failed. Price targets | A pullback that brings the reward-to-risk ratio above 1.5-to-1 would be required before the setup is actionable. | →Stable |
| CounterThe technical picture is constructive — a golden cross with the stock above all moving averages and bullish MACD signals — which could push price through resistance and open up a higher take-profit target. | ||
Volume patterns show a falling OBV alongside a 2.2 times average volume surge concentrated on selloffs — a classic distribution signal indicating that institutional sellers may be using price strength to exit positions. Momentum | OBV stabilizing or reversing higher over 4–6 weeks, alongside price holding above the 200-day moving average, would indicate the distribution phase has ended. | →Stable |
| CounterThe stock remains above its 200-day moving average with a golden cross in place, so the volume warning may reflect temporary rebalancing rather than a sustained exit by long-term holders. | ||
Quality notes flag no meaningful competitive moat, with the moat component scoring in the low range, indicating the business lacks durable pricing power or structural barriers to competition in electronics distribution.
→StableQuality
- Expectation
- EPS growth rate exceeding 15% year over year for 4 consecutive quarters would suggest the business has moved beyond commodity-margin distribution and is capturing scale or share advantages.
CounterA Piotroski F-Score of 7 out of 9 and an FCF quality score of 8 out of 10 indicate financial discipline that can partially compensate for the absence of a structural moat.
Management has beaten consensus estimates in three of the last four quarters, with the most recent print delivering a 24% upside surprise, suggesting the company tends to guide conservatively and set expectations that it can clear.
→StableEarnings
- Expectation
- Average quarterly EPS surprise stays above 5% over the next four quarters.
CounterThe one miss in the streak — a -3.5% shortfall two quarters ago — shows the run is imperfect, and with sluggish underlying revenue growth the cushion for continued beats may be limited.
With only 3.3% headroom to the take-profit level and a reward-to-risk ratio of 0.47-to-1, the near-term geometry offers materially more downside exposure than upside opportunity, and the asymmetry gate has failed.
→StablePrice targets
- Expectation
- A pullback that brings the reward-to-risk ratio above 1.5-to-1 would be required before the setup is actionable.
CounterThe technical picture is constructive — a golden cross with the stock above all moving averages and bullish MACD signals — which could push price through resistance and open up a higher take-profit target.
Volume patterns show a falling OBV alongside a 2.2 times average volume surge concentrated on selloffs — a classic distribution signal indicating that institutional sellers may be using price strength to exit positions.
→StableMomentum
- Expectation
- OBV stabilizing or reversing higher over 4–6 weeks, alongside price holding above the 200-day moving average, would indicate the distribution phase has ended.
CounterThe stock remains above its 200-day moving average with a golden cross in place, so the volume warning may reflect temporary rebalancing rather than a sustained exit by long-term holders.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The company has demonstrated consistent earnings beats but trades at a thin margin to resistance with an unfavorable risk/reward profile, a lack of competitive moat, and distributional volume patterns — the current setup favors patience over new exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.2 |
| ROA | 3.5 |
| Gross margin | 0.0 |
| Op margin | 1.3 |
| Net margin | 1.5 |
| Current ratio | 9.1 |
| FCF quality | 8.0 |
| Moat | 3.8 |
| Piotroski F | 7.8 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
5.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 8.7 |
Momentum
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.3 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.4 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.7 |
| erm sentiment | 5.0 |
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $2,028,691 (0.111% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.4 |
| quality rank | 5.7 |
| growth rank | 1.4 |
- ▸Best-in-class margins
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 4.2 |
| 52w position | 9.2 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 6.9 |
| volatility | 5.6 |
| put call | 9.8 |
| implied vol | 6.5 |
| beta | 7.7 |
| debt equity | 6.2 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 110.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.97
Upside
-10.8%
Downside
5.5%
Sizing output
AVOID
SetupRange Bound — RSI 50 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 26d with 3/4 beat streak
SuitabilityAggressive — MCap $1.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.97 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.2, Value at 6.4, and Momentum at 6.0; the weakest are Peer rank at 3.4, Insider at 3.4, and Quality at 4.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak Consistency
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Thin Risk Reward At Resistance
Trip ifPrice pulls back more than 10% from $71.14 such that the reward-to-risk ratio rises above 1.5-to-1.
- P3No Competitive Moat
Trip ifEPS growth rate exceeds 15% YoY for 4 consecutive quarters.
- P4Distribution Volume Warning
Trip ifOBV reverses higher and price closes up on volume exceeding 1.5x average daily volume for 5 consecutive sessions.