Technology solutions provider PC Connection presents investors with a complex investment case following its second-quarter 2025 results. While the company reported modest revenue growth, shrinking profitability metrics raise questions about its ability to maintain momentum in a competitive hardware market.
Financial Performance: A Tale of Two Metrics
The New Hampshire-based firm posted $759.7 million in net sales for Q2 2025, marking a 3.2% year-over-year increase. This growth stemmed primarily from data center modernization projects and enterprise transitions to Windows 11 systems. Gross profit saw marginal improvement, rising 0.9% to $137.8 million.
However, beneath these positive figures lurk concerning trends:
- Net income declined 5.2% to $24.8 million
- Gross margin contracted by 40 basis points to 18.1%
- Earnings per share remained flat at $0.97
Segment performance revealed stark contrasts:
- Business Solutions Division: Revenue climbed 5.4% to $293.2 million with gross profit up 3.8% ($68.8 million)
- Public Sector Unit: Sales plummeted 11.9%, reflecting weakening government demand
Shareholder Returns Defy Operational Challenges
Despite these headwinds, management continues returning capital to investors through:
Should investors sell immediately? Or is it worth buying PC Connection?
- A quarterly dividend of $0.15 per share payable August 29
- Substantial share repurchases totaling $106.11 million (1.83 million shares) during the quarter
This aggressive buyback program represents approximately 4% of outstanding shares at current valuations.
Technical Indicators Flash Caution Signals
Market technicians observe multiple warning signs in PC Connection’s stock performance:
- 19 out of 26 technical indicators turned bearish as of August 14
- The emergence of a KDJ death cross and bearish marubozu pattern suggests continued downward momentum
- Shares currently trade between $62.37 and $63.59, slightly above the 52-week low of $56.72 hit August 8
- Weekly and monthly losses stand at 3.35% and 3.04% respectively (through July 31)
Notably, trading volumes exceeded 208,000 shares during recent sell-offs, indicating heightened investor anxiety. Market participants now watch closely to determine whether current levels represent a consolidation phase or the beginning of a sustained downtrend.
The coming quarters will prove critical for PC Connection as it balances growth initiatives against margin preservation in an increasingly price-sensitive technology hardware environment.
Ad
PC Connection Stock: Buy or Sell?! New PC Connection Analysis from August 19 delivers the answer:
The latest PC Connection figures speak for themselves: Urgent action needed for PC Connection investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from August 19.
PC Connection: Buy or sell? Read more here...
