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ScanSource Inc (SCSC)
:SCSC
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ScanSource
(NASDAQ:SCSC)
64Neutral
ScanSource (SCSC) vs. S&P 500 (SPY)
Market Cap
$754.35M
Dividend YieldN/A
Average Volume (3M)336.76K
Price to Earnings (P/E)12.7
Beta (1Y)1.36
Revenue Growth-15.92%
EPS Growth-25.15%
CountryUS
Employees2,300
SectorTechnology
Sector Strength40
IndustryTechnology Distributors
Share Statistics
EPS (TTM)2.54
Shares Outstanding23,463,543
10 Day Avg. Volume253,911
30 Day Avg. Volume336,760
Financial Highlights & Ratios
PEG Ratio46.14
Price to Book (P/B)N/A
Price to Sales (P/S)0.27
Price to Cash Flow (P/CF)-33.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
ScanSource Business Overview & Revenue Model
Company DescriptionScanSource, Inc. (SCSC) is a leading global provider of technology products and solutions, specializing in the distribution of specialty technology products and services. The company operates in various sectors, including point-of-sale (POS), barcode, physical security, networking, communications, and emerging technologies. ScanSource partners with industry-leading suppliers to offer a wide array of products and services to its reseller and integrator customers, supporting them in delivering comprehensive solutions to end users.
How the Company Makes MoneyScanSource makes money primarily through the distribution of technology products and services. The company's revenue model is based on purchasing products from manufacturers and suppliers at wholesale prices and selling them to resellers and integrators at a markup. This distribution business is supported by a range of value-added services, including logistics, financing, technical support, and training, which enhance the company's offerings and provide additional revenue streams. ScanSource's key revenue streams include sales from its extensive portfolio of technology solutions, such as POS systems, barcode scanners, and networking equipment. Strategic partnerships with major technology manufacturers and suppliers play a crucial role in ScanSource's business model, enabling the company to maintain a diverse and competitive product lineup, thereby driving sales and profitability.
ScanSource Financial Statement Overview
Summary
ScanSource demonstrates strong financial health with solid profitability margins, a stable balance sheet, and excellent cash flow management. Despite a recent decline in revenue, the company's operational efficiency and effective cash management position it well in the hardware & equipment industry.Income Statement
ScanSource has shown solid profitability with a TTM gross profit margin of 12.64% and a net profit margin of 2.08%. However, the revenue has been declining, with a negative growth rate over the past year. The EBIT and EBITDA margins are healthy, indicating operational efficiency.75
Positive
Balance Sheet
The company's balance sheet is strong with a low debt-to-equity ratio of 0.01, reflecting minimal leverage. The return on equity is 6.99%, which is respectable, and the equity ratio is 52.89%, indicating a stable financial structure with significant reliance on equity financing.80
Positive
Cash Flow
ScanSource exhibits robust cash flow management, with a high operating cash flow to net income ratio of 4.03, and a free cash flow to net income ratio of 3.90. The free cash flow has significantly improved, showcasing effective cash generation and utilization strategies.85
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.02B | 3.26B | 3.79B | 3.53B | 3.15B | 3.05B | Gross Profit |
| 382.18M | 372.11M | 449.24M | 426.52M | 350.72M | 355.57M | EBIT |
| 79.84M | 94.68M | 135.89M | 122.17M | 61.48M | 67.86M | EBITDA |
| 122.66M | 140.91M | 170.29M | 155.06M | 97.98M | -24.22M | Net Income Common Stockholders |
| 62.93M | 77.06M | 89.81M | 88.80M | 45.39M | -79.23M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 29.68M | 185.46M | 36.18M | 37.99M | 62.72M | 29.48M | Total Assets |
| 786.80M | 1.78B | 2.07B | 1.94B | 1.67B | 1.69B | Total Debt |
| 30.43M | 153.96M | 334.26M | 271.17M | 143.17M | 218.73M | Net Debt |
| 752.00K | -31.50M | 298.08M | 233.18M | 80.46M | 189.24M | Total Liabilities |
| 308.61M | 854.78M | 1.16B | 1.13B | 940.49M | 1.01B | Stockholders Equity |
| 478.18M | 924.25M | 905.30M | 806.53M | 731.19M | 678.25M |
| Cash Flow | Free Cash Flow | ||||
| 245.49M | 363.09M | -45.75M | -131.20M | 138.58M | 219.88M | Operating Cash Flow |
| 253.53M | 371.65M | -35.77M | -124.35M | 140.94M | 226.27M | Investing Cash Flow |
| -62.52M | 9.04M | -8.26M | -3.72M | 31.93M | -55.38M | Financing Cash Flow |
| -118.82M | -227.77M | 39.53M | 108.11M | -148.32M | -156.61M |
ScanSource Technical Analysis
Negative
29.63
Price Trends
37.38
Negative
43.72
Negative
45.38
Negative
Market Momentum
-1.03
Negative
32.85
Neutral
15.31
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCSC, the sentiment is Negative. The current price of 29.63 is below the 20-day moving average (MA) of 34.91, below the 50-day MA of 37.38, and below the 200-day MA of 45.38, indicating a bearish trend. The MACD of -1.03 indicates Negative momentum. The RSI at 32.85 is Neutral, neither overbought nor oversold. The STOCH value of 15.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCSC.
ScanSource Risk Analysis
ScanSource disclosed 24 risk factors in its most recent earnings report. ScanSource reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ScanSource Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.20B | 19.64 | 14.24% | ― | -5.17% | -9.73% | |
69 Neutral | $19.50B | 18.46 | 49.04% | 1.70% | -1.77% | -1.82% | |
68 Neutral | $3.64B | 11.94 | 6.45% | 3.09% | -12.21% | -51.31% | |
66 Neutral | $4.68B | 12.65 | 6.78% | ― | -15.66% | -54.03% | |
64 Neutral | $754.35M | 12.66 | 6.79% | ― | -15.92% | -25.15% | |
62 Neutral | $8.26B | 12.30 | 8.40% | 1.67% | 4.62% | 16.28% | |
57 Neutral | $18.45B | 9.41 | -13.97% | 2.74% | 5.04% | -23.56% |
* Technology Sector Average
Performance Comparison
SCSC
ScanSource
29.63
-10.95
-26.98%
ARW
Arrow Electronics
92.08
-34.20
-27.08%
AVT
Avnet
41.51
-5.23
-11.19%
NSIT
Insight Enterprises
138.88
-43.69
-23.93%
SNX
SYNNEX
106.60
-6.78
-5.98%
CDW
CDW
146.03
-98.25
-40.22%
ScanSource Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -40.73% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance for ScanSource. Despite strong gross profit margins and an increase in recurring revenue, the company faced significant challenges with declining net sales and issues in the Specialty Technology Solutions segment. The launch of new platforms and a low net debt leverage are positive signs, but the overall sentiment is tempered by current market challenges.Highlights
Strong Gross Profit Margins
Despite a 4% decline in net sales for Q2, ScanSource achieved gross profit growth and sustained strong gross profit margins of 13.6%.
Increased Recurring Revenue
Recurring revenue contributed to 32% of consolidated gross profit, indicating a successful shift towards more stable revenue streams.
Intelisys & Advisory Segment Growth
The Intelisys & Advisory segment saw net sales and gross profits increase by 4% and 3% year-over-year, with a significant gross profit margin of 99%.
New SaaS Platform Launch
The introduction of Channel Exchange aims to enhance service offerings, potentially increasing SaaS business with double-digit growth.
Low Net Debt Leverage
ScanSource maintained a strong balance sheet with a net debt leverage ratio of 0.2x on a trailing 12-month adjusted EBITDA basis.
Lowlights
Decline in Net Sales
Consolidated net sales declined by 15.5% year-over-year and 4% quarter-over-quarter, mainly due to a drop in large deals.
Specialty Technology Solutions Segment Decline
Net sales in this segment declined 16% year-over-year and 4% quarter-over-quarter, impacted by large deal declines and FX headwinds in Brazil.
Cash Flow Challenges
The company used $8 million of free cash flow in Q2 due to late quarter timing for sales and vendor payments.
Company Guidance
During the ScanSource quarterly earnings call, the company's leadership provided guidance for fiscal year 2025, emphasizing a cautious yet optimistic outlook despite a challenging demand environment in Q2. The firm reaffirmed its annual guidance, projecting net sales between $3.1 billion and $3.5 billion, adjusted EBITDA between $140 million and $160 million, and at least $70 million in free cash flow. Key metrics from Q2 included a 15.5% year-over-year decline in consolidated net sales and an adjusted EBITDA margin of 4.7%. The call highlighted a strong gross profit margin of 13.6%, with 32% of the gross profit derived from recurring revenue, showcasing resilience amid soft demand. The Intelisys & Advisory segment exhibited growth, with net sales and gross profits increasing by 4% and 3% year-over-year, respectively, bolstered by the Resourcive acquisition. The company also reported $34 million in year-to-date free cash flow, despite a $8 million outflow in the quarter due to timing issues. The leadership expressed confidence in achieving fiscal goals while navigating a cautious tech spending environment.ScanSource Corporate Events
Executive/Board ChangesShareholder Meetings
ScanSource Shareholders Approve 2024 Incentive Plan and Directors
Neutral
Dec 10, 2024
At its annual meeting, ScanSource, Inc. received shareholder approval for its 2024 Omnibus Incentive Compensation Plan, which replaces the 2021 Plan and includes various stock-based awards for employees, officers, and directors. The approval signifies continuity in the company’s incentive structure and reflects shareholder support for the proposed compensation plans and the election of directors, as well as the ratification of Grant Thornton LLP as independent auditors for fiscal 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.