Insight Enterprises Inc. (NSIT) is seeing strong IT demand worldwide as the global recovery progresses. NSIT is cheap, trading at just 9.6x forward earnings when its industry trades at 14x.
Insight provides IT hardware, software and services to small and medium-sized businesses and the public sector around the world.
Insight Surprised By 55.3% in the Second Quarter
On Aug 4, Insight Enterprises reported its second quarter results and surprised for the fourth quarter in a row. Earnings per share were 59 cents compared to the Zacks Consensus of 38 cents.
Sales rose 23% to $1.3 billion. The increase was seen globally, as all 3 of its worldwide segments saw sales increases.
Even in North America, sales rose 21% to $865.5 million from the year ago quarter. Hardware and software both increased by 27% and 21%, respectively. Services, however, declined by 15%.
EMEA saw sales jump 28% to $359.2 million from the second quarter of 2009. Excluding currency effects, sales rose 36%. All three of the segments grew with software leading the way, jumping 34%. Services were also hot, up 31% year over year.
The company’s smallest segment, APAC, also saw sales rise 25% to $52.9 million. Excluding foreign currency movements, sales were up 14%. Insight did not break out the different segment sales for APAC.
Full Year Guidance Raised
Insight continues to see strong demand for IT hardware in North America. Given the big beat in the second quarter, along with the strong demand, the company raised its full year guidance for the second time this year.
It now expects earnings per share between $1.30 and $1.40, up from the May earnings guidance of $1.05 to $1.15 per share.
Zacks Consensus Estimates Rise
Obviously, given the company’s raised guidance, analysts moved to get their estimates in line with the company.
All 3 estimates for 2010 have moved higher in the last 30 days. The Zacks Consensus has jumped by 34 cents to $1.44 per share, which is higher than the company’s own guidance range.
Analysts now expect earnings growth of 33%.
Third quarter estimates also rose by 6 cents to 23 cents in the last month as 2 estimates moved higher during that time.
Value Fundamentals
Insight Enterprises has attractive value fundamentals across the board. In addition to its low P/E, it also has a PEG ratio of just 0.6.
Its price-to-book is at 1.3, under the industry average of 1.8.
Price-to-sales also flashes “value”, with a ratio of 0.1, also under the industry average of 0.5.
The company has a solid 1-year return on equity (ROE) of 14.3%, beating the industry average of 12.7%.
Insight Enterprises is a Zacks #1 Rank (strong buy) stock.
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