Breaking Down Insight Enterprises, Inc. (NSIT) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on Insight Enterprises (NSIT) and trying to gauge its financial stability? Did you know that in the fourth quarter of 2024, Insight Enterprises reported a 1% year-over-year increase in gross profit, reaching $439.6 million, with gross margins expanding to a record 21.2%? While consolidated net earnings saw a decrease of 59% to $37.0 million for the same quarter, the full year presents a more nuanced picture with gross profit increasing 6% to $1.8 billion. But with the stock recently hitting a 52-week low of $126.2 in April 2025, is this a buying opportunity, or are there deeper issues at play that you need to consider?

Insight Enterprises, Inc. (NSIT) Revenue Analysis

Insight Enterprises, Inc. (NSIT) is a global provider of information technology (IT) hardware, software, and service solutions. Understanding the company's revenue streams involves examining the various sources from which it generates income, the growth rates associated with these streams, and how different business segments contribute to the overall financial performance.

A breakdown of Insight Enterprises, Inc.'s primary revenue sources typically includes:

• Products: This encompasses the resale of IT hardware and software from various vendors.
• Services: This includes a range of IT services such as cloud solutions, data center management, cybersecurity, and digital transformation services.
• Regions: Revenue can be segmented geographically, typically including North America, Europe, and Asia-Pacific.

Analyzing the year-over-year revenue growth rate provides insights into the company's performance and its ability to expand its market presence. Recent financial data indicates the trends in revenue growth, reflecting the percentage increase or decrease compared to the previous year. For example, Insight Enterprises, Inc. reported $10.4 billion in net sales for the year ended December 31, 2024, compared to $10.6 billion for the year ended December 31, 2023, representing a decrease of 2%.

The contribution of different business segments to overall revenue is crucial for understanding where Insight Enterprises, Inc. generates most of its income. This involves assessing the revenue generated by each segment (e.g., products, services, and solutions) and their respective growth rates.

Significant changes in revenue streams can be driven by various factors, such as shifts in market demand, technological advancements, acquisitions, and strategic partnerships. Investors should monitor these changes to assess their potential impact on the company's future financial performance.

Here’s a look at Insight Enterprises, Inc.'s revenue and gross profit by segment for the year 2024:

Additionally, here is a table summarizing Insight Enterprises, Inc.'s consolidated statements of operations for 2024 and 2023:

For further insights into Insight Enterprises, Inc.'s financial health, you can explore this resource: Breaking Down Insight Enterprises, Inc. (NSIT) Financial Health: Key Insights for Investors

Insight Enterprises, Inc. (NSIT) Profitability Metrics

Assessing the financial health and profitability of Insight Enterprises, Inc. (NSIT) involves examining several key metrics and trends. These include gross profit, operating profit, and net profit margins, as well as a comparison with industry averages and an analysis of operational efficiency.

Let's delve into these critical areas to provide a clear picture of Insight Enterprises, Inc.'s financial performance.

Gross Profit: Gross profit represents the revenue remaining after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs. For the fiscal year 2024, Insight Enterprises, Inc. reported a gross profit of $1.77 billion.

Operating Profit: Operating profit is calculated by subtracting operating expenses from gross profit. It reflects the profitability of a company's core business operations. Insight Enterprises, Inc.'s operating profit for 2024 was $421.2 million.

Net Profit: Net profit, also known as net income, is the profit remaining after all expenses, including interest and taxes, have been deducted from revenue. In 2024, Insight Enterprises, Inc. achieved a net profit of $277.1 million.

Profitability Margins: Examining profit margins provides deeper insights into a company's profitability. These margins are typically expressed as percentages and include:

• Gross Profit Margin: Calculated as (Gross Profit / Revenue) 100.
• Operating Profit Margin: Calculated as (Operating Profit / Revenue) 100.
• Net Profit Margin: Calculated as (Net Profit / Revenue) 100.

For Insight Enterprises, Inc. in 2024:

• The gross profit margin was approximately 16.0%.
• The operating profit margin stood at around 3.8%.
• The net profit margin was about 2.5%.

Trends in Profitability Over Time: Analyzing profitability trends over several years can reveal whether a company's financial performance is improving, declining, or remaining stable. Consistent increases in profit margins typically indicate better operational efficiency and cost management.

Comparison with Industry Averages: Comparing Insight Enterprises, Inc.'s profitability ratios with industry averages provides context. If the company's margins are higher than the industry average, it suggests a competitive advantage. Conversely, lower margins may indicate areas needing improvement.

Analysis of Operational Efficiency: Operational efficiency is critical for maintaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of strong operational performance. In 2024, Insight Enterprises, Inc. demonstrated steady management of its operational costs, contributing to stable profit margins.

For more detailed insights, you can explore Breaking Down Insight Enterprises, Inc. (NSIT) Financial Health: Key Insights for Investors.

Below is a table summarizing Insight Enterprises, Inc.'s key profitability figures for 2024:

Insight Enterprises, Inc. (NSIT) Debt vs. Equity Structure

Understanding how Insight Enterprises, Inc. (NSIT) finances its operations and growth is crucial for investors. This involves analyzing its debt levels, debt-to-equity ratio, and how the company strategically uses debt and equity.

As of December 31, 2024, Insight Enterprises, Inc. (NSIT) reported the following debt figures:

• Total long-term debt: $1.12 billion
• Short-term debt: $6.05 million

The debt-to-equity ratio is a key metric to evaluate a company's financial leverage. As of the end of 2024, Insight Enterprises, Inc. (NSIT) had a debt-to-equity ratio of approximately 1.17. This ratio is calculated by dividing the total liabilities by shareholders equity. Comparing this to the industry average provides context on whether Insight Enterprises, Inc. (NSIT) is more or less leveraged than its peers.

Recent financial activities provide insights into Insight Enterprises, Inc. (NSIT)'s debt management:

Insight Enterprises, Inc. (NSIT) utilizes both debt and equity to fund its operations and strategic initiatives. The balance between these two is vital for maintaining financial flexibility and supporting growth. Here’s a simplified look:

Insight Enterprises, Inc. (NSIT)'s strategy involves carefully balancing debt financing with equity funding to optimize its capital structure. While debt can provide leverage and potentially increase returns, it also introduces financial risk. Equity, on the other hand, provides a more stable funding base but can dilute existing shareholders' ownership.

For more detailed insights, you can explore Breaking Down Insight Enterprises, Inc. (NSIT) Financial Health: Key Insights for Investors.

Insight Enterprises, Inc. (NSIT) Liquidity and Solvency

Assessing Insight Enterprises, Inc. (NSIT)'s financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Let's delve into the key indicators for NSIT.

Assessing Insight Enterprises, Inc.'s Liquidity:

• Current and Quick Ratios: These ratios provide a snapshot of NSIT's ability to cover its short-term liabilities with its short-term assets.
• The current ratio for the most recent quarter (MRQ) is 1.18.
• The quick ratio for the most recent quarter (MRQ) is 1.09.
• A cash ratio of 0.06 indicates there are more current liabilities than liquid assets.

These figures suggest that NSIT has enough liquid assets to cover its immediate liabilities. A current ratio above 1 indicates that the company has more current assets than current liabilities.

Analysis of Working Capital Trends:

Working capital is a measure of a company's short-term financial health, calculated as current assets minus current liabilities. Fluctuations in working capital can indicate changes in a company's operational efficiency and liquidity.

Factors that drove the Net Working Capital change in 2024:

• A $62.02 million decrease in Inventory
• A $565.28 million increase in Receivables
• An $804.48 million increase in Creditors
• A $19.57 million increase in Other Current Assets
• A $320.8 million decrease in Others

Cash Flow Statements Overview:

Cash flow statements provide critical insights into the movement of cash both into and out of a company. Analyzing the trends in operating, investing, and financing cash flows can reveal a lot about a company’s financial stability and its strategies for growth and sustainability.

Key highlights from the cash flow statement for the full year 2024 include:

• Cash flows provided by operating activities were $632.8 million.
• Cash from Operations (TTM) 632.85M.
• Cash from Investing (TTM) -303.28M.
• Levered Free Cash Flow (TTM) 571.53M.
• Unlevered Free Cash Flow (TTM) 602.21M.
• Free Cash Flow / Share (TTM) $18.15.

For the first nine months of 2024:

• Cash flow provided by operating activities in the first nine months of 2024 was $417.7 million compared to cash provided by operating activities of $413.7 million in the first nine months of 2023.
• Cash flow provided by operating activities increased 1% during the first nine months of 2024 compared to the same period in 2023.

Potential Liquidity Concerns or Strengths:

Insight Enterprises' cash flow from operations was $632.8 million for the full year, and $215.1 million for the fourth quarter of 2024 indicating a strong ability to generate cash from its business activities. The company's management expects to use cash generated in 2024, in excess of working capital needs, to pay down its ABL facility and inventory financing facilities, as well as to fund strategic acquisitions, which underscores confidence in its liquidity position.

Despite these strengths, investors should be aware of certain factors that could impact liquidity. For instance, S&P Global Ratings noted that Insight has good liquidity despite its large intra-year working capital swings. They also cautioned that they could lower the rating on Insight if its leverage were sustained above 3x, which includes intra-period borrowings on its ABL facility, potentially due to reliance on its ABL revolver to fund increasing working capital.

Here is an overview of Insight Enterprises, Inc.'s financial health: Key Insights for Investors: Breaking Down Insight Enterprises, Inc. (NSIT) Financial Health: Key Insights for Investors

Insight Enterprises, Inc. (NSIT) Valuation Analysis

Determining whether Insight Enterprises, Inc. (NSIT) is overvalued or undervalued requires a multifaceted approach, incorporating various financial ratios, stock price trends, and analyst estimates. Below is an analysis based on available data:

Valuation Ratios

• Price-to-Earnings (P/E) Ratio: NSIT's trailing P/E ratio is around 20.36. The forward P/E ratio is 13.58.
• Price-to-Book (P/B) Ratio: The P/B ratio for NSIT is approximately 2.39.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: NSIT's EV/EBITDA ratio is about 10.03.

These ratios provide a snapshot of how the market values NSIT relative to its earnings, book value, and cash flow. Compared to its peers, NSIT's P/E ratio of 17x is higher than the peer average of 13.3x, suggesting it may be relatively expensive. However, when compared to the US Electronic industry average of 19.3x, NSIT's P/E ratio suggests it could be a good value.

Stock Price Trends

• Over the last 52 weeks, the stock price has decreased by approximately -26.68%.
• The 52-week high was $228.07, while the 52-week low was $126.09.
• As of April 17, 2025, the latest closing stock price for Insight Enterprises was $133.35.

These figures indicate significant price volatility over the past year. The stock has experienced a notable decline, but recent data shows some price recovery.

Dividend Yield and Payout Ratios

• Insight Enterprises does not currently pay a dividend.
• Therefore, the dividend yield and payout ratio are not applicable (N/A).

The absence of dividends may influence investor perception, especially for those seeking regular income.

Analyst Consensus

• The consensus rating is 'Buy'.
• The average price target for NSIT is $185.00, which is 38.55% higher than the current price.
• Another analyst suggests an average 12-month price target of $188.02.

Analysts generally have a positive outlook on NSIT, anticipating a potential increase in the stock price. However, it's important to note the range of these estimates, with some analysts providing a high estimate of $235.00 and a low estimate of $156.00.

Additional Valuation Insights

Alpha Spread’s analysis suggests that Insight Enterprises Inc. is undervalued by 20% compared to the current market price. Similarly, ValueInvesting.io estimates an intrinsic value of $306.11, indicating the stock is undervalued by 129.60%. A discounted cash flow model estimates a fair value of $158.37, suggesting the stock is 15.8% undervalued.

Financial Health Metrics

Key metrics reflecting Insight Enterprises' financial health include:

These metrics offer insights into NSIT's profitability, liquidity, and solvency.

For further insights into the investors of Insight Enterprises, Inc., consider reading: Exploring Insight Enterprises, Inc. (NSIT) Investor Profile: Who’s Buying and Why?

Insight Enterprises, Inc. (NSIT) Risk Factors

Several internal and external factors could significantly affect Insight Enterprises, Inc.'s financial well-being. These risks span from intense industry competition to evolving regulatory landscapes and fluctuating market conditions. Understanding these potential challenges is crucial for investors.

Here's an overview of key risks:

• Industry Competition: The technology solutions market is highly competitive.
• Regulatory Changes: Changes in regulations, especially concerning data privacy and cybersecurity, could increase compliance costs.
• Market Conditions: Economic downturns or shifts in technology spending can reduce demand for Insight Enterprises, Inc.'s services.

Operational, financial, and strategic risks are often detailed in the company's filings. For example, their 2024 reports highlight concerns about maintaining profitability amid rising operating costs and the need to adapt to rapidly changing technology.

Mitigation strategies often involve diversifying service offerings, enhancing cybersecurity measures, and closely monitoring economic indicators to adjust business strategies proactively. These strategies are designed to minimize the impact of potential risks and ensure long-term stability.

Here are some strategic risks that Insight Enterprises, Inc. faces:

• Integration Risks: Difficulties integrating acquired businesses or technologies.
• Talent Management: Challenges in attracting and retaining skilled personnel.
• Supply Chain Disruptions: Disruptions in the supply chain affecting product availability and pricing.

Insight Enterprises, Inc. also provides insights into its risk management approach through its annual reports. These reports detail the company's efforts to identify, assess, and mitigate risks across various aspects of its operations.

For more insights into Insight Enterprises, Inc.'s core values and strategic direction, you can explore: Mission Statement, Vision, & Core Values of Insight Enterprises, Inc. (NSIT).

Below is a table summarizing potential risks and mitigation strategies based on recent information:

Understanding these risks and mitigation efforts is essential for assessing Insight Enterprises, Inc.'s financial health and making informed investment decisions.

Insight Enterprises, Inc. (NSIT) Growth Opportunities

Insight Enterprises, Inc. (NSIT) demonstrates future growth prospects driven by several key factors. These include strategic acquisitions, market expansions, innovative solutions, and key partnerships.

Key growth drivers for Insight Enterprises, Inc. (NSIT) include:

• Product Innovations: Focusing on developing and integrating new IT solutions, including cloud, data, AI, and cybersecurity offerings, to meet evolving client needs.
• Market Expansions: Broadening global reach and penetration into new markets, particularly in regions with increasing demand for digital transformation.
• Acquisitions: Strategically acquiring companies to enhance capabilities, expand market share, and add new technologies or services to their portfolio.

For example, Insight Enterprises, Inc. (NSIT) acquired SADA, a premier Google Cloud Platform service provider, in January 2024. This acquisition is expected to boost Insight Enterprises, Inc. (NSIT)'s capabilities in cloud solutions and AI, driving revenue growth and earnings.

Future revenue growth projections and earnings estimates will depend on several factors such as:

• Continued execution of strategic initiatives.
• Overall health of the IT spending environment.
• Successful integration of acquired businesses.

Strategic initiatives and partnerships poised to drive future growth:

• Cloud Solutions: Expanding cloud service offerings and partnerships with major cloud providers like Microsoft Azure, Amazon Web Services, and Google Cloud Platform.
• Digital Transformation Services: Helping clients modernize their IT infrastructure and adopt new technologies to improve efficiency and competitiveness.
• Cybersecurity: Providing comprehensive cybersecurity solutions to protect clients from evolving cyber threats.

Insight Enterprises, Inc. (NSIT) holds several competitive advantages that position it for sustained growth:

• Extensive Partner Network: Strong relationships with leading technology vendors.
• Broad Solutions Portfolio: A wide array of IT products, services, and solutions.
• Global Reach: Ability to serve clients worldwide.

These elements collectively enhance Insight Enterprises, Inc. (NSIT)'s ability to capitalize on market opportunities and sustain growth in the dynamic IT sector. To understand the company's core values and strategic vision, refer to the Mission Statement, Vision, & Core Values of Insight Enterprises, Inc. (NSIT).