ScanSource, Inc. (SCSC) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

ScanSource, Inc. (SCSC) Technology Profile & Competitive Position

ScanSource, Inc. distributes technology products and solutions, focusing on specialty technology and modern communications & cloud. The company serves diverse industries, including retail, healthcare, and government, providing solutions like mobile computing, data capture, and unified communications. With a market capitalization of $1.05B, ScanSource operates in a competitive technology distribution landscape.

What Is the Investment Thesis for SCSC?

ScanSource, Inc. presents a compelling investment case based on its strategic positioning in the technology distribution market. With a P/E ratio of 12.2 and a market capitalization of $1.05B, the company demonstrates a stable financial profile. Growth catalysts include the increasing demand for cybersecurity solutions and the expansion of cloud-based communication services. The company's ability to serve diverse industries, from retail to healthcare, provides a resilient revenue base. However, potential risks include competitive pressures in the technology distribution sector and the impact of economic cycles on technology spending. The company's beta of 1.25 indicates higher volatility compared to the market, which investors may want to evaluate. The company's gross margin of 13.5% and profit margin of 2.4% highlight areas for potential improvement in operational efficiency.

Based on FMP financials and quantitative analysis

SCSC Key Highlights

Market capitalization of $1.05B indicates a mid-sized player in the technology distribution market.

• P/E ratio of 12.2 suggests a potentially undervalued stock compared to industry peers.
• Gross margin of 13.5% reflects the company's ability to generate revenue after accounting for the cost of goods sold.
• Profit margin of 2.4% indicates the percentage of revenue that translates into profit after all expenses.
• Beta of 1.25 suggests the stock is more volatile than the market, potentially offering higher returns but also higher risk.

Who Are SCSC's Competitors?

SCSC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are SCSC's Key Strengths?

Diversified product portfolio across specialty technology and modern communications.

• Established distribution network and vendor relationships.
• Expertise in serving diverse vertical markets.
• Value-added services enhance customer loyalty.

What Are SCSC's Weaknesses?

Relatively low profit margin compared to industry peers.

• Dependence on technology vendors for product supply.
• Exposure to economic cycles and technology spending patterns.
• Higher beta indicates increased stock volatility.

What Could Drive SCSC Stock Higher?

Increasing demand for cybersecurity solutions driving revenue growth.

• Expansion of cloud-based communication services boosting market share.
• Potential strategic acquisitions to expand product portfolio (timeline: 2026-2027).
• Enhanced focus on vertical markets driving customer satisfaction and retention.
• Penetration of emerging markets increasing global presence.

What Are the Key Risks for SCSC?

Intense competition from larger technology distributors impacting market share.

• Rapid technological advancements rendering existing products obsolete.
• Economic downturns reducing technology spending and impacting revenue.
• Dependence on technology vendors for product supply creating potential disruptions.
• Supply chain disruptions affecting product availability and pricing.

What Are the Growth Opportunities for SCSC?

• Expansion in Cybersecurity Solutions: The increasing frequency and sophistication of cyber threats are driving demand for cybersecurity solutions. ScanSource can capitalize on this trend by expanding its portfolio of cybersecurity products and services. The global cybersecurity market is projected to reach $300 billion by 2027, offering a substantial growth opportunity for ScanSource. Timeline: Ongoing, with continuous product and service enhancements.
• Growth in Cloud-Based Communication Services: The shift towards remote work and digital transformation is driving demand for cloud-based communication services. ScanSource can leverage its Modern Communications & Cloud segment to offer comprehensive unified communications and collaboration solutions. The global unified communications market is expected to reach $75 billion by 2028. Timeline: Ongoing, with continuous service enhancements and partnerships.
• Penetration of Emerging Markets: Expanding into emerging markets presents a significant growth opportunity for ScanSource. These markets are experiencing rapid technological adoption and increasing demand for technology solutions. ScanSource can leverage its expertise in specialty technology solutions and modern communications & cloud to establish a presence in these markets. Timeline: 2027-2030, with phased market entry strategies.
• Strategic Acquisitions: Strategic acquisitions can enable ScanSource to expand its product portfolio, enter new markets, and enhance its competitive position. Acquiring companies with complementary technologies and customer bases can accelerate growth and create synergies. Timeline: Ongoing, with continuous evaluation of potential acquisition targets.
• Enhanced Focus on Vertical Markets: Deepening its focus on specific vertical markets, such as healthcare and education, can enable ScanSource to tailor its solutions to meet the unique needs of these industries. This targeted approach can enhance customer satisfaction and drive revenue growth. Timeline: Ongoing, with continuous market analysis and solution customization.

What Are SCSC's Competitive Advantages?

• Established distribution network and relationships with technology vendors.
• Broad product portfolio spanning specialty technology solutions and modern communications & cloud.
• Expertise in serving diverse vertical markets with tailored solutions.
• Value-added services that enhance customer loyalty and retention.

What Does SCSC Do?

ScanSource, Inc., incorporated in 1992 and headquartered in Greenville, South Carolina, is a technology distributor operating across the United States, Canada, and internationally. The company functions through two primary segments: Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment offers a range of products including enterprise mobile computing, data capture, barcode printing, point of sale (POS) systems, payment solutions, networking equipment, electronic physical security, and cybersecurity technologies. These solutions cater to industries requiring efficient data management and security, such as retail, distribution, and healthcare. The Modern Communications & Cloud segment focuses on communications technologies and services, providing voice, video conferencing, wireless, data networking, cable, unified communications and collaboration, cloud services, and IP networks. This segment serves various vertical markets, including education, healthcare, and government, enabling them to enhance their communication infrastructure and adopt modern cloud-based solutions. ScanSource's evolution has been marked by its ability to adapt to changing technology trends and customer needs, positioning itself as a key intermediary between technology vendors and end-users. The company's broad portfolio and geographic reach allow it to serve a diverse customer base, making it a significant player in the technology distribution market.

What Products and Services Does SCSC Offer?

• Distributes technology products and solutions.
• Operates through Specialty Technology Solutions and Modern Communications & Cloud segments.
• Provides enterprise mobile computing and data capture solutions.
• Offers point of sale (POS) and payment solutions.
• Distributes networking and electronic physical security products.
• Provides voice, video conferencing, and unified communications solutions.
• Offers cloud services and IP networks.

How Does SCSC Make Money?

• Generates revenue through the sale of technology products and solutions to resellers and integrators.
• Operates as a distributor, connecting technology vendors with end-users.
• Provides value-added services such as training, support, and configuration.
• Focuses on building strong relationships with both vendors and customers.

What Industry Does SCSC Operate In?

ScanSource, Inc. operates within the technology distribution industry, which is characterized by rapid technological advancements and evolving customer demands. The industry is experiencing growth driven by the increasing adoption of cloud computing, cybersecurity solutions, and mobile technologies. Competition is intense, with players like Ingram Micro and Tech Data also vying for market share. ScanSource differentiates itself through its focus on specialty technology solutions and modern communications & cloud, catering to specific vertical markets. The global technology distribution market is projected to reach significant growth in the coming years, presenting opportunities for ScanSource to expand its market presence.

Who Are SCSC's Key Customers?

• Resellers and integrators who serve end-users in various industries.
• Businesses in manufacturing, warehouse and distribution, retail, and e-commerce.
• Organizations in hospitality, transportation and logistics, government, education, and healthcare.

Company Profile

ScanSource, Inc. operates in the Technology Distributors industry within the Technology sector. It is headquartered in Greenville, US. The company is led by CEO Michael L. Baur. SCSC has traded publicly since 1994.

How ScanSource, Inc. Is Valued

ScanSource, Inc. carries a market capitalization of $1.05B, placing it in the small-cap category. Relative to its peer group, SCSC's quantitative score of 78/100 is above the peer average of 52/100.

Return on equity for ScanSource, Inc. stands at 8.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 4.1%, showing how much profit it generates from its asset base. SCSC trades at a trailing price-to-earnings ratio of 12.18, below the Technology sector average of ~34x. Its free cash flow yield is 11.7%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.86 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 6.6%, the inverse of the P/E and a quick read on earnings relative to price.

ScanSource, Inc.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 3.82 places it in the safe zone, indicating low near-term bankruptcy risk.

Wall Street analysts project ScanSource, Inc. revenue of about $3.09B for fiscal 2026, with EPS near $3.94.

SCSC Financials

SCSC Latest News

SCSC Analyst Consensus

SCSC MoonshotScore

Common Questions About SCSC (Technology)

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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