# ScanSource (SCSC.US)

Canonical: https://gigainvestors.com/s/SCSC

Analysis as of: 2026-10-16T07:31:49.044Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $60.44 per share; close as of 2026-10-15.

Estimated value: low $51.77 per share, central $58.74 per share, high $68.03 per share. Buy at or below the central value $58.74 per share. Valuation as of 2026-10-16T07:31:49.044Z; scenarios are not confidence intervals.

Expected annual return: 9.8% at the stated quote. About 9.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 1

- Operating margin variation: 0.70×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.02×

- FY2018: 0.02×

- FY2019: 0.02×

- FY2020: -0.02×

- FY2021: 0.02×

- FY2022: 0.03×

- FY2023: 0.04×

- FY2024: 0.03×

- FY2025: 0.03×

- FY2026: 0.03×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 8.6%

- ROIC, second-lowest year: 5.5%

- Typical minus recent gross margin: -1.7 pp

- Typical gross margin (annual median): 11.8%

- Recent gross margin (lower of latest and 3-year median): 13.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 0.2%

- ROIC including acquisitions, ten-year median: 6.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.9%

- FY2018: 5.5%

- FY2019: 7.1%

- FY2020: -7.6%

- FY2021: 7.9%

- FY2022: 10.8%

- FY2023: 9.9%

- FY2024: 10.2%

- FY2025: 9.3%

- FY2026: 10.9%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.61×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $249M

- Net income, five-year total: $406M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.2 pp

- Working capital / revenue, change between three-year averages: -0.6 pp

- Working capital / revenue, final three-year average: 18.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: -1.61×

- FY2023: 1.21×

- FY2024: 1.25×

- FY2025: 1.31×

- FY2026: 1.18×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 7.1% vs 10.2%

- Per-share earnings: 2.38 to 3.06 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.1%

- Ordinary dilution, 5-year annual growth: -3.2%

- Market cap gain: $25M

- Cumulative retained earnings: $169M

- Diluted shares, 10-year annual growth: -2.1%

- Diluted shares, 5-year annual growth: -3.2%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 3.2%

- Per-share value change: $0.67

- Per-share value, starting three-year median: $2.38

- Per-share value, ending three-year median: $3.06

- Buybacks concentrated in cheaper years (correlation): 0.76

- Average buyback yield: 3.4%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $384M

- Cumulative net income, 10 years: $384M

- ROIC, first three-year median: 7.1%

- ROIC, last three-year median: 10.2%

Chart: Earnings per share; fiscal year observations.

- FY2017: $2.71

- FY2018: $1.29

- FY2019: $2.24

- FY2020: -$7.59

- FY2021: $0.42

- FY2022: $3.45

- FY2023: $3.54

- FY2024: $3.06

- FY2025: $3.00

- FY2026: $3.64

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: -2.3%

- Receivables to sales index (DSRI): 1.11×

- Restructuring years, last five: 3

- Stock compensation / operating cash flow: 11.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.56×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.34×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -1.5%

- FY2018: 0.3%

- FY2019: 4.1%

- FY2020: -24.8%

- FY2021: -7.8%

- FY2022: 11.0%

- FY2023: 6.1%

- FY2024: -16.6%

- FY2025: -2.3%

- FY2026: -2.3%

## Holders

- [Richard Pzena](https://gigainvestors.com/PIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 1.3% a year for ten years · sales +6.1%

Story as of 2026-10-16T09:59:33.589Z; price observation 2026-10-15.

Price needs cash profits to grow 1.3% a year for ten years

### Sales · FY2025–2026

sales +6.1%; source https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm; observed 2026-08-20.

- FY2017: $3.6B 

- FY2018: $3.8B 

- FY2019: $3.9B 

- FY2020: $3.0B 

- FY2021: $3.2B 

- FY2022: $3.5B 

- FY2023: $3.8B 

- FY2024: $3.3B 

- FY2025: $3.0B 

- FY2026: $3.2B 

### Gross margin · FY2026

gross margin 13.6%; source https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm; observed 2026-08-20.

- FY2017: 10.8% 

- FY2018: 11.3% 

- FY2019: 11.7% 

- FY2020: 11.7% 

- FY2021: 11.1% 

- FY2022: 12.1% 

- FY2023: 11.9% 

- FY2024: 12.2% 

- FY2025: 13.4% 

- FY2026: 13.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in electronics & computer distribution; annual sales are USD 3.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm (filed 2026-08-20); FY2026: revenue 3226062000; grossProfit 437355000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); SCSC.US: ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Brazil, and internationally. It operates through two segments: Specialty Technology Solutions, and Intelisys & Advisory. The Specialty Technology Solutions segment offers mobility and barcode, including mobile computing; barcode scanners and imagers, radio frequency identification devices, barcode printing and related services; point of sale systems and integrated pos software platforms; payment terminals, such as self-service kiosks, payment terminals and mobile payment devices; physical security comprising video surveillance and analytics, and video management software and access control; networking, such as switching, and routing and wireless products and software; communications, including voice, video, communication platform integration, and contact center solutions; managed connectivity and wireless enablement solutions. This segment offers applications that have evolved from traditional uses, such as inventory control, materials handling, distribution, shipping and warehouse management, and healthcare applications. The Intelisys & Advisory segment offers connectivity and software-defined networking, CX (unified communications as a service and contact center as a service), cloud/data center, security, managed AI, and wireless and IOT. This segment helps channel sales partners service various end users, including businesses of all sizes. It serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

### Why customers stay

Margins ranged from 12.2% to 13.6% during 2024–26; it earns 8.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2024: grossProfit / revenue = 12.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2025: grossProfit / revenue = 13.4%.

- Source: https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm (filed 2026-08-20); FY2026: grossProfit / revenue = 13.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); 10-year return on capital observations [[2017,0.07908916245470843],[2018,0.05485027796075613],[2019,0.07074757985346021],[2020,-0.07565025197623361],[2021,0.07904699512094907],[2022,0.10837856327658434],[2023,0.09863402341871182],[2024,0.10155730599613266],[2025,0.09271258430119378],[2026,0.1089221781440629]]; median 0.0859008733779511. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 12% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm (filed 2026-08-20); Gross margin observations: [[2021,0.11130993149054559],[2022,0.12083055353710478],[2023,0.11860403656974734]]; range within 2 percentage points.

### Where the cash goes

Reinvests 19.5% of cash earnings; paid dividends in 5 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2017: growth capex 0; upkeep 12432000; cash acquisitions 83804000; owner earnings 81782000. Growth capex plus acquisitions / owner earnings = 1.0247242669536083.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2018: growth capex 0; upkeep 8159000; cash acquisitions 143768000; owner earnings 13253000. Growth capex plus acquisitions / owner earnings = 10.847958952689957.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2021: growth capex 0; upkeep 2363000; cash acquisitions 0; owner earnings 41939000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2023: growth capex 0; upkeep 9979000; cash acquisitions 0; owner earnings 108444000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2024: growth capex 0; upkeep 8555000; cash acquisitions 0; owner earnings 96514000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); FY2025: growth capex 0; upkeep 8286000; cash acquisitions 56673000; owner earnings 93457000. Growth capex plus acquisitions / owner earnings = 0.6064072247129696.

- Source: https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm (filed 2026-08-20); FY2026: growth capex 0; upkeep 9286000; cash acquisitions 18220000; owner earnings 93220000. Growth capex plus acquisitions / owner earnings = 0.19545161982407208.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); Dividend observations: [[2017,0],[2018,0],[2019,1509000],[2020,754000],[2021,585000],[2022,2304000],[2023,910000],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm (filed 2026-08-20); FY2026: cash repurchases 97900000 USD.

### Are managers owners

Insiders own 2.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); SCSC.US SharesStats.PercentInsiders = 2.2399999999999998 percentage points; cache date 2026-10-15.

### What the price says

The price assumes cash profits grow 1.3% yearly over ten years; actual growth was 5.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-20); Ten-year compound average after fade. Initial solved rate 0.0051711394476222795. Price 60.44; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 2.573987334657324 → FY2026 4.297436843075788. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $35.00 per share

- 2016-11: $37.85 per share

- 2016-12: $40.35 per share

- 2017-01: $39.55 per share

- 2017-02: $40.25 per share

- 2017-03: $39.25 per share

- 2017-04: $39.50 per share

- 2017-05: $38.00 per share

- 2017-06: $40.30 per share

- 2017-07: $39.60 per share

- 2017-08: $39.25 per share

- 2017-09: $43.65 per share

- 2017-10: $42.95 per share

- 2017-11: $36.00 per share

- 2017-12: $35.80 per share

- 2018-01: $34.20 per share

- 2018-02: $32.75 per share

- 2018-03: $35.55 per share

- 2018-04: $34.30 per share

- 2018-05: $39.15 per share

- 2018-06: $40.30 per share

- 2018-07: $41.25 per share

- 2018-08: $40.65 per share

- 2018-09: $39.90 per share

- 2018-10: $38.88 per share

- 2018-11: $38.04 per share

- 2018-12: $34.38 per share

- 2019-01: $38.31 per share

- 2019-02: $37.55 per share

- 2019-03: $35.82 per share

- 2019-04: $37.65 per share

- 2019-05: $29.21 per share

- 2019-06: $32.56 per share

- 2019-07: $33.95 per share

- 2019-08: $28.26 per share

- 2019-09: $30.55 per share

- 2019-10: $32.30 per share

- 2019-11: $35.42 per share

- 2019-12: $36.95 per share

- 2020-01: $34.89 per share

- 2020-02: $28.43 per share

- 2020-03: $21.39 per share

- 2020-04: $25.92 per share

- 2020-05: $24.65 per share

- 2020-06: $24.09 per share

- 2020-07: $22.95 per share

- 2020-08: $24.69 per share

- 2020-09: $19.83 per share

- 2020-10: $20.10 per share

- 2020-11: $25.10 per share

- 2020-12: $26.38 per share

- 2021-01: $24.19 per share

- 2021-02: $28.44 per share

- 2021-03: $29.95 per share

- 2021-04: $30.23 per share

- 2021-05: $30.53 per share

- 2021-06: $28.13 per share

- 2021-07: $27.59 per share

- 2021-08: $35.58 per share

- 2021-09: $34.79 per share

- 2021-10: $35.78 per share

- 2021-11: $31.25 per share

- 2021-12: $35.08 per share

- 2022-01: $31.18 per share

- 2022-02: $31.58 per share

- 2022-03: $34.79 per share

- 2022-04: $34.24 per share

- 2022-05: $38.74 per share

- 2022-06: $31.14 per share

- 2022-07: $31.95 per share

- 2022-08: $28.97 per share

- 2022-09: $26.41 per share

- 2022-10: $30.98 per share

- 2022-11: $29.86 per share

- 2022-12: $29.22 per share

- 2023-01: $32.93 per share

- 2023-02: $31.18 per share

- 2023-03: $30.44 per share

- 2023-04: $27.35 per share

- 2023-05: $28.76 per share

- 2023-06: $29.56 per share

- 2023-07: $30.09 per share

- 2023-08: $32.78 per share

- 2023-09: $30.31 per share

- 2023-10: $30.40 per share

- 2023-11: $33.43 per share

- 2023-12: $39.61 per share

- 2024-01: $39.26 per share

- 2024-02: $43.23 per share

- 2024-03: $44.04 per share

- 2024-04: $41.62 per share

- 2024-05: $47.43 per share

- 2024-06: $44.31 per share

- 2024-07: $52.05 per share

- 2024-08: $50.94 per share

- 2024-09: $48.03 per share

- 2024-10: $42.41 per share

- 2024-11: $50.41 per share

- 2024-12: $47.45 per share

- 2025-01: $41.85 per share

- 2025-02: $36.61 per share

- 2025-03: $34.01 per share

- 2025-04: $32.99 per share

- 2025-05: $40.38 per share

- 2025-06: $41.81 per share

- 2025-07: $38.84 per share

- 2025-08: $43.65 per share

- 2025-09: $43.99 per share

- 2025-10: $42.91 per share

- 2025-11: $41.12 per share

- 2025-12: $39.06 per share

- 2026-01: $42.99 per share

- 2026-02: $36.78 per share

- 2026-03: $36.30 per share

- 2026-04: $41.12 per share

- 2026-05: $46.27 per share

- 2026-06: $52.09 per share

- 2026-07: $56.62 per share

- 2026-08: $57.09 per share

- 2026-09: $58.73 per share

- 2026-10: $60.44 per share

## Annual estimated value (USD per share)

- FY2017: low $31.18 per share, central $37.40 per share, high $43.56 per share

- FY2018: low $31.83 per share, central $36.22 per share, high $42.07 per share

- FY2019: low $34.63 per share, central $42.92 per share, high $50.08 per share

- FY2020: low $25.47 per share, central $28.98 per share, high $33.66 per share

- FY2021: low $21.92 per share, central $24.94 per share, high $28.96 per share

- FY2024: low $23.57 per share, central $26.16 per share, high $29.62 per share

- FY2025: low $42.66 per share, central $48.16 per share, high $55.49 per share

- FY2026: low $48.07 per share, central $54.55 per share, high $63.17 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/918965/000091896526000044/scsc-20260630.htm); period 2026-06-30, filed 2026-08-20.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.