CDW’s Q3 2025 Results: A Tale of Two Metrics

The latest quarterly report from IT solutions provider CDW for Q3 2025 paints a nuanced financial picture. The company delivered a performance marked by contrasting signals, with strength in one key profitability measure offset by revenue that fell just short and persistent pressure on margins. This dichotomy is influencing the stock's recent trading pattern.

A standout positive from the quarter was the adjusted earnings per share (EPS) of $2.71, which surpassed analyst estimates of $2.62. Furthermore, CDW reaffirmed its commitment to returning capital to shareholders. The company announced an increase in its quarterly dividend to $0.63 per share, a raise of approximately one percent. The payment scheduled for December 10th will mark a full decade of consecutive annual dividend increases.

Underlying the business, certain fundamental metrics remain robust. The firm's return on equity continues to be exceptionally strong, standing above 43 percent.

Revenue Miss and Margin Compression Highlight Challenges

On the other side of the ledger, total revenue for the quarter came in at $5.74 billion. While this represents a 4.0 percent year-over-year increase, it narrowly missed the consensus expectation of $5.75 billion. More concerning to some observers is the ongoing trend of contracting profitability. The adjusted operating margin declined to 9.2 percent, down from 9.7 percent in the same period last year.

Should investors sell immediately? Or is it worth buying CDW?

This margin pressure, coupled with the slight revenue shortfall, reflects broader market apprehensions regarding corporate IT spending budgets. These concerns are contributing to the stock's weakness, independent of the quarterly figures alone.

Market Sentiment and Long-Term Analyst Outlook

CDW's share price has felt the impact of this cautious environment. Having touched a 52-week low of $135.63 in late November, the equity currently trades around $146, a level significantly below its previous highs. This valuation appears to discount the prevailing skepticism about near-term IT sector prospects.

Despite the near-term headwinds, the majority of Wall Street analysts maintain a constructive long-term view. The consensus rating sits at "Moderate Buy," with an average price target close to $190. This target implies a potential upside of nearly 30 percent from current levels, suggesting researchers believe CDW's solid market position will allow it to outperform as the IT market eventually recovers.

Looking ahead, market experts are forecasting EPS of $2.32 for the ongoing fourth quarter. For the full year, CDW's management anticipates the U.S. IT market to grow in the low single-digit percentage range and aims to outpace this growth by 200 to 300 basis points. The company is expected to release its next official results in February 2026.