CDW Corp: With Solid Earnings and Buyout Talk, Probably Little Upside Left

May.29.07 | About: CDW Corp. (CDWC)

When CDW Corp. (CDWC) announced earnings for the first quarter, I described the results as solid. The 8.0% growth was above average for the computer-related industries though below the “double-digit” growth investors typically (and quite arbitrarily) expect from tech-related firms.

Then, they achieved that double-digit growth rate in the second quarter, though there were some questions about the quality of the sales. Still, investors have been pleased by the results, and given CDW’s size and position in the channel I’m not surprised that there are talks to take the company private.

That said, with the stock now trading with a 19x FY2008 P/E multiple and a 12x EV/trailing EBITDA, I wonder how much more a buyer would be willing to pay. I wish I had bought this one earlier, but it’s looking way too late now.

CDWC 1-yr chart:

CDWC 1-yr chart