Let’s dig into the relative performance of ScanSource (NASDAQ: SCSC) and its peers as we unravel the now-completed Q3 it distribution & solutions earnings season.

IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement.

The 8 it distribution & solutions stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.4% since the latest earnings results.

ScanSource (NASDAQ: SCSC)

Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ: SCSC) is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers.

ScanSource reported revenues of $739.7 million, down 4.6% year on year. This print fell short of analysts’ expectations by 6.1%, but it was still a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ revenue estimates.

“Our team delivered double-digit EPS growth and strong free cash flow in the first quarter,” said Mike Baur, Chair and CEO, ScanSource, Inc.

ScanSource delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 8% since reporting and currently trades at $38.53.

Is now the time to buy ScanSource? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: ePlus (NASDAQ: PLUS)

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

ePlus reported revenues of $608.8 million, up 23.4% year on year, outperforming analysts’ expectations by 17.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

ePlus pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.5% since reporting. It currently trades at $89.16.

Is now the time to buy ePlus? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Connection (NASDAQ: CNXN)

Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ: CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.

Connection reported revenues of $709.1 million, down 2.2% year on year, falling short of analysts’ expectations by 4.7%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.

As expected, the stock is down 7.3% since the results and currently trades at $56.43.

Read our full analysis of Connection’s results here.

Insight Enterprises (NASDAQ: NSIT)

With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.

Insight Enterprises reported revenues of $2.00 billion, down 4% year on year. This print came in 5.9% below analysts' expectations. Overall, it was a softer quarter as it also recorded a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.

The stock is down 19.2% since reporting and currently trades at $83.73.

Read our full, actionable report on Insight Enterprises here, it’s free for active Edge members.

Ingram Micro (NYSE: INGM)

Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE: INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.

Ingram Micro reported revenues of $12.6 billion, up 7.2% year on year. This number surpassed analysts’ expectations by 3%. It was a strong quarter as it also recorded revenue guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ revenue estimates.

The stock is down 7.7% since reporting and currently trades at $20.36.

Read our full, actionable report on Ingram Micro here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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