ScanSource, Inc. (SCSC) stock analysis

P/E above its 5-year median

ScanSource's P/E of 14.0 is above its own 5-year median of 12.4.

P/E below the industry

ScanSource's P/E of 14.0 is below the Professional and Commercial Equipment and Supplies median of 20.0.

EV/EBITDA above its 5-year median

ScanSource's EV/EBITDA of 8.7 is above its 5-year median of 7.5.

P/B below the industry

ScanSource's price-to-book of 0.98 is below the Professional and Commercial Equipment and Supplies median of 2.23.

Trading below fair value

The share price of $44.69 is below our fair value estimate of $57.91.

Margin of safety over 20%

The price is 22.8% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -5.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 0.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -9.1% over the last twelve months, against a 5-year average of 48.8% a year.

Growing faster than the industry

Revenue grew 14.8% over the last twelve months; the Professional and Commercial Equipment and Supplies median is 13.1%.

Guidance raised

ScanSource raised its FY26 Free cash flow (non-GAAP) outlook on May 7, 2026.

Gross margin slipping

Gross margin was 13.0% over the last twelve months, against 13.8% a year earlier.

Return on equity under 15%

Return on equity was 7.4% over the last twelve months and averaged 9.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 6.9%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

ScanSource's return on equity of 7.4% is below the Professional and Commercial Equipment and Supplies median of 10.9%.

Earnings grew over 5 years

Net income grew 48.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 2.0% over the last twelve months, against a 5-year average of 2.4%.

Net margin above the industry

ScanSource's net margin of 2.0% is above the Professional and Commercial Equipment and Supplies median of 1.8%.

Low debt

Debt is 11.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 19.6% five years ago to 11.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 57.4% of total debt.

Interest well covered

Operating income covers interest expense 11.0 times.

Short-term assets cover short-term debts

Current assets are 1.75 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.08; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

ScanSource has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.