Value
5.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 5.4 |
| P/S | 9.9 |
| EV/EBITDA | 3.9 |
| Fwd P/E | 6.7 |
| PEG | 4.4 |
- ▸Forward P/E: 19.1x
- ▸PEG: 2.14
CNXN · Why this verdict
Why PC Connection (CNXN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
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.
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. | Tripped→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. | ↑Improving |
| 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.
Tripped→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.
↑ImprovingMomentum
- 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.
Per-dimension breakdown
Quality
4.5/10data 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 | 5.2 |
| Piotroski F | 8.9 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
5.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 8.7 |
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.8 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.1 |
| erm sentiment | 5.0 |
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $3,078,317 (0.151% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.7 |
| quality rank | 5.7 |
| growth rank | 1.4 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.1 |
| support resistance | 1.2 |
| 52w position | 9.6 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.6 |
| volatility | 5.5 |
| put call | 3.3 |
| implied vol | 6.1 |
| max pain risk | 3.0 |
| beta | 7.7 |
| debt equity | 10.0 |
- ▸Above max pain $70
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 7.5 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 6 days
- ▸Dividend aristocrat: 1.0% yield
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.4=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-1.44
Upside
-20.1%
Downside
13.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.0B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.6>=5.5. Top dim: Momentum at 7.6; weakest: Technical at 4.0. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Momentum at 7.6, Risk (lower is worse) at 6.5, and Catalyst at 6.2; the weakest are Technical at 4.0, Peer rank at 4.1, and Quality at 4.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -1.44 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 ResistanceTripped
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.