Insight Enterprises, Inc. EBITDA jumped on 17.8% and EBITDA Margin showed almost no change
02/11/2021 • About Insight Enterprises, Inc. (
$NSIT) • By InTwits
Insight Enterprises, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 4.4% in 2020 vs. 4.0% in 2019 vs. 3.4% in 2016
- Insight Enterprises, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has highly profitable business model: ROIC is 13.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.1x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Insight Enterprises, Inc.'s Revenue increased on 7.9%. Revenue growth showed slowdown in 20Q4 - it was -0.3% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.82 pp from 26.7% to 25.9% in 2020. EBITDA Margin grew at 0.26 pp per annum in 2016-2020.
Gross Margin increased slightly on 0.86 pp from 14.7% to 15.6% in 2020. Gross Margin followed a growing trend at 0.51 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 0.76 pp from 11.4% to 12.2% in 2020. SG&A as a % of Revenue grew at 0.36 pp per annum in the last 5 years.
Net Income margin showed almost no change in 2020.
Investments (CAPEX, working capital and M&A)
Insight Enterprises, Inc.'s CAPEX/Revenue was 0.29% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 0.48%.
Return on investment
The company operates at good ROIC (13.7%) and ROE (13.8%). ROIC decreased slightly on 1.0 pp from 14.7% to 13.7% in 2020. ROE decreased slightly on 1.1 pp from 14.8% to 13.8% in 2020. ROIC declined at -1.9 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.1x and Debt / EBITDA is 1.4x. Net Debt / EBITDA dropped on 1.6x from 2.7x to 1.1x in 2020. Debt dropped on 44.1% while cash jumped on 11.9%.
Insight Enterprises, Inc. has no short term refinancing risk: cash is higher than short term debt (584.5%).
Valuation and dividends
The company's trades at EV/EBITDA 9.1x and P/E 16.8x.
Management team
The company's CEO Kenneth T Lamneck "Ken" has spent 11 years with the company. Glynis A Bryan is a Insight Enterprises, Inc.'s CFO. Glynis A Bryan has spent 13 years at the company.
Financial and operational results
FY ended 12/31/2020
Insight Enterprises, Inc. ($NSIT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 5,486 | 6,704 | 7,080 | 7,731 | 8,341 | 7.9% |
| Gross Profit | 743 | 919 | 994 | 1,138 | 1,300 | 14.2% |
| SG&A | 585 | 723 | 757 | 881 | 1,014 | 15.1% |
| EBITDA | 187 | 222 | 291 | 308 | 363 | 17.8% |
| EBIT | 149 | 179 | 254 | | | |
| Interest expence | 9 | 19 | 23 | | | |
| Tax | 55 | 68 | 48 | | | |
| Net Income | 85 | 91 | 164 | 159 | 173 | 8.3% |
| Stock Based Compensation | 11 | 13 | 15 | | | |
Balance Sheet
|
|---|
| Cash | 203 | 106 | 143 | 115 | 128 | 11.9% |
| Accounts Receivable | 1,437 | 1,815 | 1,932 | | | |
| Inventory | 217 | 231 | 149 | | | |
| Accounts Payable | 1,070 | 899 | 978 | | | |
| Short Term Debt | 0 | 17 | 1 | 21 | 22 | 2.9% |
| Long Term Debt | 40 | 297 | 196 | 918 | 503 | -45.2% |
Cash flow
|
|---|
| Capex | 12 | 19 | 17 | 69 | 24 | -65.0% |
| Acquisitions | 10 | 185 | 74 | | | |
Ratios
|
|---|
| Revenue growth | 2.1% | 22.2% | 5.6% | 9.2% | 7.9% | |
| EBITDA growth | 13.7% | 18.7% | 31.2% | 5.9% | 17.8% | |
|
|---|
| Gross Margin | 13.5% | 13.7% | 14.0% | 14.7% | 15.6% | 0.9% |
| EBITDA Margin | 3.4% | 3.3% | 4.1% | 4.0% | 4.4% | 0.4% |
| EBIT Margin | 2.7% | 2.7% | 3.6% | | |
| SG&A, % of revenue | 10.7% | 10.8% | 10.7% | 11.4% | 12.2% | 0.8% |
| SBC, % of revenue | 0.2% | 0.2% | 0.2% | | |
| Net Income Margin | 1.5% | 1.4% | 2.3% | 2.1% | 2.1% | 0.0% |
| CAPEX, % of revenue | 0.2% | 0.3% | 0.2% | 0.9% | 0.3% | -0.6% |
|
|---|
| ROIC | 20.7% | 19.3% | 20.0% | 14.7% | 13.7% | -1.0% |
| ROE | 12.1% | 11.6% | 17.9% | 14.8% | 13.8% | -1.1% |
| Net Debt/EBITDA | -0.9x | 0.9x | 0.2x | 2.7x | 1.1x | -1.6x |
| Interest expence / Average debt | 21.2% | 10.8% | 8.9% | | | |
People
|
|---|
| Insider ownership | 2.0% | 2.0% | 2.0% | | | |
| Employees | 5,930 | 6,697 | 7,420 | | | |
| Revenue/Employee, th. $ | 925 | 1,001 | 954 | | | |
Insight Enterprises, Inc. ($NSIT) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,144 | 1,969 | 1,936 | 2,291 | | 27.2% | 7.2% | 1.3% | -0.3% |
| EBITDA | 77 | 98 | 85 | 97 | | 8.4% | 14.1% | 38.6% | 7.4% |
| Net Income | 34 | 46 | 39 | 53 | | -13.6% | -7.2% | 43.4% | 24.3% |
Balance Sheet
|
|---|
| Cash | 63 | 154 | 75 | 128 | | -49.8% | 37.3% | -46.5% | 11.9% |
| Short Term Debt | 23 | 22 | 22 | 22 | | 34.5% | 34.4% | 6.5% | 2.9% |
| Long Term Debt | 824 | 507 | 362 | 503 | | 396.4% | 427.2% | -59.7% | -45.2% |
Ratios
|
|---|
| Gross Margin | 15.2% | 16.5% | 15.9% | 15.0% | | 0.4% | 1.5% | 1.4% | 0.2% |
| EBITDA Margin | 3.6% | 5.0% | 4.4% | 4.2% | | -0.6% | 0.3% | 1.2% | 0.3% |
| Net Income Margin | 1.6% | 2.4% | 2.0% | 2.3% | | -0.7% | -0.4% | 0.6% | 0.5% |
Peers in Technology Distributors
Below you can find Insight Enterprises, Inc. benchmarking vs. other companies in Technology Distributors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Galaxy Next Generation Inc ($GAXY) | - | 3.7% | - | - | 23.3% |
| Wayside Technology Group, Inc. ($WSTG) | - | -61.6% | 13.0% | 15.1% | 20.5% |
| Synnex Corporation ($SNX) | - | 21.2% | 17.6% | 18.5% | 3.9% |
| CDW Corporation ($CDW) | - | 6.1% | 9.5% | 11.0% | 2.4% |
| EACO Corp ($EACO) | - | 5.7% | 23.1% | 14.5% | 1.8% |
| |
|---|
| Median (8 companies) | 5.3% | 4.2% | 8.9% | 14.5% | 2.1% |
|---|
| Insight Enterprises, Inc. ($NSIT) | - | 22.2% | 5.6% | 9.2% | 7.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Galaxy Next Generation Inc ($GAXY) | 70.0% | 61.4% | - | 6.1% | 51.0% |
| EACO Corp ($EACO) | 29.3% | 28.5% | 28.5% | 27.7% | 27.2% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.2% | 30.4% | 23.7% | 16.5% | 23.3% |
| CDW Corporation ($CDW) | 16.6% | 16.5% | 16.7% | 16.9% | 17.4% |
| PC Connection, Inc. ($CNXN) | 13.8% | 13.1% | 15.2% | 16.0% | 16.2% |
| |
|---|
| Median (8 companies) | 14.2% | 16.9% | 16.3% | 15.2% | 16.8% |
|---|
| Insight Enterprises, Inc. ($NSIT) | 13.5% | 13.7% | 14.0% | 14.7% | 15.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 7.7% | 7.6% | 7.7% | 8.3% | 9.0% |
| EACO Corp ($EACO) | 4.7% | 4.5% | 5.9% | 6.4% | 6.6% |
| Synnex Corporation ($SNX) | 3.6% | 3.9% | 3.9% | 5.0% | 5.7% |
| Arrow Electronics, Inc. ($ARW) | 4.4% | 4.1% | 4.5% | 1.4% | 4.1% |
| PC Connection, Inc. ($CNXN) | 3.4% | 3.1% | 3.7% | 4.6% | 3.5% |
| |
|---|
| Median (8 companies) | 3.6% | 3.8% | 4.0% | 4.6% | 3.8% |
|---|
| Insight Enterprises, Inc. ($NSIT) | 3.4% | 3.3% | 4.1% | 4.0% | 4.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| EACO Corp ($EACO) | 0.3% | 5.5% | 0.8% | 0.8% | 3.0% |
| ADDvantage Technologies Group, Inc. ($AEY) | 0.8% | 0.4% | 0.3% | 1.1% | 1.2% |
| CDW Corporation ($CDW) | 0.5% | 0.5% | 0.5% | 1.3% | 0.9% |
| Synnex Corporation ($SNX) | 0.9% | 0.6% | 0.6% | 0.6% | 0.8% |
| Galaxy Next Generation Inc ($GAXY) | 0.0% | 15.1% | - | 0.0% | 0.8% |
| |
|---|
| Median (8 companies) | 0.4% | 0.5% | 0.5% | 0.7% | 0.8% |
|---|
| Insight Enterprises, Inc. ($NSIT) | 0.2% | 0.3% | 0.2% | 0.9% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 18.8% | 20.1% | 23.1% | 26.0% | 23.5% |
| EACO Corp ($EACO) | 22.2% | 16.1% | 21.2% | 23.0% | 14.6% |
| Synnex Corporation ($SNX) | 13.5% | 13.7% | 9.6% | 11.6% | 11.7% |
| Arrow Electronics, Inc. ($ARW) | 12.5% | 12.1% | 13.3% | 1.4% | 11.3% |
| PC Connection, Inc. ($CNXN) | 18.6% | 16.6% | 17.0% | 19.6% | 11.2% |
| |
|---|
| Median (8 companies) | 12.1% | 9.9% | 11.2% | 19.0% | 11.3% |
|---|
| Insight Enterprises, Inc. ($NSIT) | 20.7% | 19.3% | 20.0% | 14.7% | 13.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Arrow Electronics, Inc. ($ARW) | 2.2x | 2.3x | 2.2x | 7.5x | 1.9x |
| CDW Corporation ($CDW) | 2.8x | 2.7x | 2.4x | 2.2x | 1.6x |
| Synnex Corporation ($SNX) | 1.2x | 2.1x | 3.9x | 2.4x | 1.3x |
| EACO Corp ($EACO) | -0.7x | 1.2x | 0.5x | 0.5x | 1.0x |
| PC Connection, Inc. ($CNXN) | -0.5x | -0.6x | -0.9x | -0.6x | -0.9x |
| |
|---|
| Median (6 companies) | 0.7x | 1.2x | 1.2x | 1.4x | 1.2x |
|---|
| Insight Enterprises, Inc. ($NSIT) | -0.9x | 0.9x | 0.2x | 2.7x | 1.1x |
