On Wednesday, Stifel maintained a Hold rating on Insight Enterprises (NASDAQ:NSIT) stock while increasing the shares target to $200 from $192. The firm’s analyst expects the company to report quarterly sales of $2.479 billion and adjusted earnings per share (EPS) of $2.81. These figures are close to the consensus estimates of $2.471 billion in sales and $2.83 in EPS.
The updated sales estimate represents a sequential growth of 4.2% and a year-over-year increase of 5.5%. This growth is anticipated to be uniform across all regions, with North America seeing a rise of 5.3%, Europe, the Middle East, and Africa (EMEA) growing by 6.8%, and the Asia-Pacific (APAC) region increasing by 4.9%.
The analyst attributes this performance to strong software and services sales which are expected to more than compensate for weaker hardware demand. However, there is an anticipation of improvement in PC demand as the year progresses.
The report also projects a significant 12.5% year-over-year rise in gross profit dollars, supported by a 10.5% increase from the previous quarter. Consequently, the gross margin is expected to expand by 112 basis points quarterly, reaching 19.7%. For the full year 2024, the analyst predicts a gross margin of 19.3%, factoring in a modest impact from the predicted recovery in PC sales in the second half of the fiscal year.
The decision to boost the price target to $200 reflects the optimism about the company's ability to grow its software and services business, which is seen as the main driver for the expected increase in gross profit and margin expansion. Despite the Hold rating, the revised price target suggests a positive outlook for Insight Enterprises' financial performance.
InvestingPro Insights
Insight Enterprises (NASDAQ:NSIT) has been a topic of discussion among analysts, with Stifel maintaining a Hold rating and lifting the price target. To provide additional context, InvestingPro data reveals a market capitalization of $7.09 billion and a P/E ratio of 23.77, which adjusts to 23.0 for the last twelve months as of Q1 2024. This valuation is supported by a strong free cash flow yield, as indicated by an InvestingPro Tip. Moreover, the company has experienced a significant return over the past week, with a 10.86% price total return, and is trading near its 52-week high, at 99.91% of this peak.
InvestingPro Tips suggest that while the stock is currently in overbought territory, based on the RSI, analysts have revised their earnings upwards for the upcoming period, reflecting a positive sentiment. Additionally, there are 14 more InvestingPro Tips available for Insight Enterprises, which can be accessed at https://www.investing.com/pro/NSIT. For those interested in a deeper analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes additional tips and metrics to guide investment decisions.
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