ScanSource, Inc. (SCSC)
NASDAQInformation TechnologyTechnology DistributorsSnapshot 2026-09-09
$56.96-1.27%
Close 2026-09-09 · 1-day change
NASDAQInformation TechnologyTechnology DistributorsSnapshot 2026-09-09
Intact: The reason to own it still holds.
ScanSource grows sales about 4% a year. Free cash flow is at least $90 million. Profit margins stay steady. The stock is cheap compared to peers.
Sales could fall below $3 billion. Free cash flow might drop under $70 million. Profit margins could shrink. This would hurt earnings and the stock price.
The price is about 53% below our fair value near $111. Analysts expect about 4% revenue growth. We agree the stock is cheap but see risks to growth and cash flow.
Breaks if: Free cash flow falls below $70 million in FY26
Raise and deliver on free cash flow expectations for fiscal year 2026, targeting at least $90 million.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on growth and margin expansion. The current thesis state is intact, supported by recent strong financial results and strategic acquisitions.
The market currently prices SCSC as cheap compared to its peers, reflecting a low expectations gap. This suggests that investors may not fully account for the potential upside from management's growth strategies.
Management is on track with its priorities, including growth from the MicroAge acquisition and increased free cash flow. Recent financial performance has been strong, but there is a near-term risk of earnings misses due to the company's smaller size and erratic earnings history.
The long-term thesis hinges on SCSC's ability to maintain its growth trajectory and manage risks effectively. Key factors include the potential for favorable economic conditions, such as Fed rate cuts, and the performance of sector peers.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improvement. Revenue guidance for fiscal year 2026 also looks strong. The IT distribution sector is seeing better sentiment. Peers like Insight Enterprises and Connection reported double-digit revenue beats. This positive trend boosts expectations for companies like ScanSource.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Profit margins decline significantly below recent levels
Breaks if: Revenue falls below $3.0 billion in FY26
Overall, SCSC's fundamentals appear solid, but investors should remain cautious of potential volatility. Not investment advice.