Insight Enterprises Inc. - Value

Demand is strong for IT hardware and software as companies finally have started investing in their businesses again. Insight Enterprises Inc. (NSIT) is taking advantage of the surge in demand, as sales jumped 21% in the third quarter. NSIT is not expensive, trading at just 8.8x forward estimates.

This Zacks #1 Rank (strong buy) is on the front lines of IT demand as it provides IT hardware, software and services to small and medium-sized businesses and the public sector around the world. It continues to see strong demand.

Another Beat In the Third Quarter

On Nov 3, Insight Enterprises reported its third quarter results and beat the Zacks Consensus by 35%. This wasn't surprising, as the company has now surprised 7 straight quarters and has beat big in the last 4 quarters, by an average of 60%.

Earnings per share were 31 cents compared with the consensus of 23 cents.

North American sales drove the quarter as its the company's largest segment by far. Net sales jumped 27% to $871.2 million compared to a year ago. Hardware and software sales continued to be hot, rising 34% and 25% respectively, but services fell 14%.

It was the opposite story in the EMEA segment. Even though net sales were up 8% to $267.8 million, hardware sales grew just 1% and software increased only 12%. Service sales soared by 33%, though, compared with last year.

Its smallest segment, APAC, saw sales actually fall 6% to $33.2 million.

Insight Enterprises Is Bullish

In updated guidance about the fourth quarter, Insight still expects to see strong demand for hardware and software products even as the service side is forecast to remain a bit weak.

It gave an EPS range of 38 to 43 cents. Analysts are currently calling for the high end of the company's range, at 43 cents.

Zacks Consensus Estimates Rise

Given the beat in the third quarter and general company optimism looking forward, analysts have been revising their 2010 and 2011 estimates higher.

The 2010 Zacks Consensus is up 8 cents to $1.52 in the last 60 days. This is earnings growth of 40.1%.

For 2011, growth is expected to slow but will still be in the double digits at 10.1%. The Zacks Consensus has risen to $1.67 from $1.60 in the last 2 months.

Insight Enterprises' Shares Are Cheap

Insight is a value stock that is also growing. The company has a PEG ratio of just 0.6, well under its peers of 1.1.

In addition to the low P/E and attractive PEG ratio, it also has a price-to-book ratio of 1.2, which is under its peers at 1.3.

The company also sports a solid 1-year return one equity (ROE) of 14.7%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

 
INSIGHT ENTRPRS (NSIT): Free Stock Analysis Report
 
Zacks Investment Research