Head-To-Head Analysis: PC Connection (CNXN) & Quantum (QTM)

PC Connection (NASDAQ: CNXN) and Quantum (NYSE:QTM) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

This table compares PC Connection and Quantum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PC Connection 1.88% 10.81% 7.11%
Quantum -1.77% -7.26% -0.83%

Institutional and Insider Ownership

39.9% of PC Connection shares are held by institutional investors. Comparatively, 64.2% of Quantum shares are held by institutional investors. 57.3% of PC Connection shares are held by insiders. Comparatively, 8.6% of Quantum shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for PC Connection and Quantum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PC Connection 0 0 1 0 3.00
Quantum 0 0 1 0 3.00

PC Connection currently has a consensus price target of $33.00, indicating a potential upside of 35.19%. Quantum has a consensus price target of $10.00, indicating a potential upside of 147.52%. Given Quantum’s higher probable upside, analysts plainly believe Quantum is more favorable than PC Connection.

Earnings and Valuation

This table compares PC Connection and Quantum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PC Connection $2.91 billion 0.22 $54.86 million $2.05 11.91
Quantum $505.35 million 0.28 $3.64 million ($0.25) -16.16

PC Connection has higher revenue and earnings than Quantum. Quantum is trading at a lower price-to-earnings ratio than PC Connection, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

PC Connection has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Quantum has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500.

Summary

PC Connection beats Quantum on 8 of the 12 factors compared between the two stocks.

About PC Connection

PC Connection, Inc. is a provider of a range of information technology (IT) solutions. The Company conducts its business operations through three business segments: small- to medium-sized businesses (SMB), Large Account and Public Sector. The Company enables customers to design, enable, manage and service their IT environments. The Company’s IT products include computer systems, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors and other suppliers. The Company also offers services involving design, configuration and implementation of IT solutions. The Company markets its products and services through its Websites, including www.connection.com, www.connection.com/enterprise, www.connection.com/publicsector, and www.macconnection.com. It uses a combination of outbound telemarketing, including some on-site sales solicitation by business development managers.

About Quantum

Quantum Corporation focuses on scale-out storage, archive and data protection, providing solutions for capturing, sharing, managing and preserving digital assets over the entire data lifecycle. The Company’s end-to-end tiered storage solutions enable users to maximize the value of their data by making it accessible whenever and wherever needed, retaining it indefinitely and reducing total cost and complexity. It works with a network of distributors, value-added resellers (VARs), direct marketing resellers (DMRs), original equipment manufacturers (OEMs) and other suppliers to meet customers’ evolving needs. Its scale-out storage portfolio includes StorNext software, appliances and full systems called StorNext Pro Solutions, as well as Xcellis workflow storage, QXS disk storage, Lattus extended online storage and Q-Cloud Archive and Vault services. Its StorNext offerings enable customers to manage large unstructured data sets in an information workflow.

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