As of December 15, 2025, PC Connection Inc's estimated intrinsic value ranges from $65.13 to $310.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $310.01 | +414.3% |
| Discounted Cash Flow (5Y) | $247.27 | +310.2% |
| Dividend Discount Model (Multi-Stage) | $147.85 | +145.3% |
| Dividend Discount Model (Stable) | $65.13 | +8.0% |
| Earnings Power Value | $77.81 | +29.1% |
Is PC Connection Inc (CNXN) undervalued or overvalued?
With the current market price at $60.28, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate PC Connection Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.46 | 0.66 |
| Cost of equity | 6.0% | 8.6% |
| Cost of debt | 4.5% | 4.5% |
| Tax rate | 26.2% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 4.6% | 5.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $247 | $6,056M | 88.4% |
| 10-Year Growth | $310 | $7,640M | 77.2% |
| 5-Year EBITDA | $110 | $2,580M | 72.7% |
| 10-Year EBITDA | $153 | $3,673M | 52.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $93M |
| Discount Rate (WACC) | 5.9% - 4.6% |
| Enterprise Value | $1,558M - $1,995M |
| Net Debt | $(188)M |
| Equity Value | $1,746M - $2,183M |
| Outstanding Shares | 25M |
| Fair Value | $69 - $86 |
| Selected Fair Value | $77.81 |
| Metric | Value |
|---|---|
| Market Capitalization | $1522M |
| Enterprise Value | $1334M |
| Trailing P/E | 18.18 |
| Forward P/E | 12.01 |
| Trailing EV/EBITDA | 6.85 |
| Current Dividend Yield | 92.94% |
| Dividend Growth Rate (5Y) | 5.71% |
| Debt-to-Equity Ratio | 1.20 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $93.00 |
| Discounted Cash Flow (5Y) | 25% | $61.82 |
| Dividend Discount Model (Multi-Stage) | 20% | $29.57 |
| Dividend Discount Model (Stable) | 15% | $9.77 |
| Earnings Power Value | 10% | $7.78 |
| Weighted Average | 100% | $201.94 |
Based on our comprehensive valuation analysis, PC Connection Inc's intrinsic value is $201.94, which is approximately 235.0% above the current market price of $60.28.
Key investment considerations:
Given these factors, we believe PC Connection Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.