ScanSource (NASDAQ:SCSC) Issues Quarterly Earnings Results, Misses Expectations By $0.26 EPS

by · The Markets Daily

ScanSource (NASDAQ:SCSC – Get Free Report) issued its earnings results on Thursday. The industrial products company reported $0.86 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.12 by ($0.26), FiscalAI reports. ScanSource had a net margin of 2.44% and a return on equity of 10.10%. The business had revenue of $962.29 million for the quarter, compared to the consensus estimate of $860.35 million. During the same period last year, the business posted $1.06 EPS. The firm’s revenue for the quarter was up 30.1% compared to the same quarter last year.

Here are the key takeaways from ScanSource’s conference call:

  • ScanSource raised its FY2027 outlook, including MicroAge, to $3.8 billion–$4.0 billion in net sales and $175 million–$185 million in adjusted EBITDA. It reaffirmed a target of at least $85 million in full-year free cash flow.
  • Profitability lagged sales growth: net sales rose 30% year over year, while reported net profit increased 9%. Management attributed margin pressure to an unusually high mix of lower-margin large hardware deals—estimated to account for 110–120 basis points of compression—and a customer-specific bad-debt reserve in Brazil.
  • Both segments grew sales and gross profit, with broad-based North American demand across security, networking, barcode mobility, and communications hardware. Management said the large-deal mix was unusual and expects a more balanced mix over the rest of the year.
  • MicroAge expands ScanSource’s reach in cloud, cybersecurity, data center, and AI, and management sees potential to bring its managed services and AI solutions to existing channel partners. The company has begun a co-selling pilot, so the opportunity’s results are still being tested.
  • Intelisys net billings grew 3.8%, and management is redirecting investment toward recruiting partners and generating new orders. The payoff may take time: the company said revenue realization can take six to nine months for smaller deals and 12 to 18 months for larger ones.

ScanSource Price Performance

Shares of NASDAQ:SCSC traded down $2.29 during mid-day trading on Friday, reaching $42.78. The stock had a trading volume of 695,826 shares, compared to its average volume of 250,830. The business’s 50 day moving average price is $58.21 and its 200 day moving average price is $48.11. ScanSource has a 1 year low of $33.76 and a 1 year high of $66.78. The company has a market cap of $871.43 million, a P/E ratio of 13.41, a price-to-earnings-growth ratio of 0.77 and a beta of 1.28. The company has a current ratio of 1.76, a quick ratio of 1.15 and a debt-to-equity ratio of 0.11.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on SCSC shares. Zacks Research lowered shares of ScanSource from a “strong-buy” rating to a “hold” rating in a report on Tuesday, October 20th. Barclays boosted their target price on shares of ScanSource from $43.00 to $51.00 and gave the stock an “equal weight” rating in a report on Monday, October 12th. Northcoast Research downgraded shares of ScanSource from a “buy” rating to a “neutral” rating in a report on Monday, August 17th. Weiss Ratings upgraded shares of ScanSource from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Thursday, October 8th. Finally, Wall Street Zen cut shares of ScanSource from a “strong-buy” rating to a “buy” rating in a research note on Saturday. One research analyst has rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus price target of $51.00.

View Our Latest Analysis on SCSC

Key Headlines Impacting ScanSource

Here are the key news stories impacting ScanSource this week:

Insider Transactions at ScanSource

In other ScanSource news, Director Charles Mathis sold 3,000 shares of ScanSource stock in a transaction that occurred on Friday, September 11th. The stock was sold at an average price of $58.00, for a total value of $174,000.00. Following the sale, the director owned 25,027 shares of the company’s stock, valued at $1,451,566. The trade was a 10.70% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, CAO Brandy Ford sold 5,293 shares of the company’s stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $57.43, for a total value of $303,976.99. Following the sale, the chief accounting officer directly owned 9,907 shares in the company, valued at $568,959.01. This trade represents a 34.82% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders have sold 95,632 shares of company stock worth $5,484,582. 3.18% of the stock is owned by corporate insiders.

About ScanSource

(Get Free Report)

ScanSource, Inc (NASDAQ: SCSC) is a technology distributor that connects manufacturers of business technology products with value-added resellers, systems integrators and other channel partners. The company provides products, services and expertise intended to help partners design, deploy and support technology solutions for business customers.

ScanSource’s offerings include point-of-sale and payment technology, barcode scanners, mobile computing devices, networking equipment, cybersecurity products, communications systems and cloud-based services.

Read More