- Over the last few years, Datalink has been able to grow at a CAGR of 35.2%. Yet in 2014, the company's growth has slowed to 5.5%.
- The slower growth is being caused by lackluster product sales. Datalink's product sales have been driven by customer growth. As customer growth has slowed, product revenue has also slowed.
- Management's recent acquisition will increase the customer base and should drive revenue. Bear Data has minimal customer and product overlap with Datalink. This will add incremental revenue through cross-selling.
- Additionally, the company's service team is helping to increase both the top and bottom line. The service team has been vital to several large customer acquisitions.
- In 2014, Datalink's slower growth appears to be temporary. The company is well position to accelerate growth. As growth accelerates, the stock should trend higher.