ScanSource (NASDAQ:SCSC) Issues Earnings Results

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

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 Trading Down 5.1%

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

Analyst Ratings Changes

A number of analysts have weighed in on the company. Zacks Research lowered ScanSource from a “strong-buy” rating to a “hold” rating in a report on Tuesday, October 20th. Weiss Ratings raised shares of ScanSource from a “hold (c+)” rating to a “buy (b-)” rating in a report on Thursday, October 8th. Barclays raised their price target on shares of ScanSource from $43.00 to $51.00 and gave the stock an “equal weight” rating in a research report on Monday, October 12th. Northcoast Research downgraded ScanSource from a “buy” rating to a “neutral” rating in a research note on Monday, August 17th. Finally, Wall Street Zen raised shares of ScanSource from a “buy” rating to a “strong-buy” rating in a report on Sunday, October 25th. One equities research analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $51.00.

Insider Activity

In other news, CEO Michael Baur sold 57,359 shares of the company’s stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $58.04, for a total transaction of $3,329,116.36. Following the completion of the transaction, the chief executive officer directly owned 200,698 shares of the company’s stock, valued at approximately $11,648,511.92. This represents a 22.23% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CAO Brandy Ford sold 5,293 shares of the company’s stock in a transaction on Friday, September 4th. The shares were sold at an average price of $57.43, for a total transaction of $303,976.99. Following the completion of the transaction, the chief accounting officer owned 9,907 shares of the company’s stock, valued at $568,959.01. This represents a 34.82% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 95,632 shares of company stock worth $5,484,582 over the last three months. Insiders own 3.18% of the company’s stock.

Trending Headlines about ScanSource

Here are the key news stories impacting ScanSource this week:

• Positive Sentiment: Fiscal Q1 revenue rose 30.1% year over year to $962.3 million, topping analysts’ $860.4 million estimate. ScanSource also forecast fiscal 2027 revenue of $3.8 billion to $4.0 billion, above the roughly $3.7 billion consensus. Article: ScanSource posts better-than-expected sales and guides for strong full-year sales
• Negative Sentiment: Adjusted EPS was $0.86, missing the $1.12 consensus and down from $1.06 a year earlier. The earnings miss suggests the strong sales growth has not translated into comparable per-share earnings. Article: ScanSource shares fall after lower fiscal Q1 non-GAAP earnings miss estimates
• Negative Sentiment: Shares fell below their 200-day moving average following the disappointing results, a technical signal that may add to near-term selling pressure. Article: ScanSource shares break below 200-day moving average on disappointing earnings

About ScanSource

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.