Solution Provider, Distributor Stock Winners And Losers In The First Half Of 2020

All but six of the 25 publicly held solution provider and distributor companies on our watch list saw the price of their stock price tumble in the first six months of 2020—many by double-digit amounts and two losing more than 50 percent of their value. Take a look at whose shares managed to hold their value and which ones took the biggest losses.

Solution Provider Stocks Struggle To Make Gains In First-Half 2020

The economy was soaring for the first months of 2020 and stock markets were riding high right along with them. Then came the pandemic and the recession, and it’s been a tough year ever since.

The Dow Jones Industrials closed June 30, 2020, at 25,812.88—much higher than where the index stood in mid-March, but still down 9.55 percent from 28,538.44 where it began the year. The tech-heavy Nasdaq, however, closed at 10,058.77 on June 30, up 12.11 percent from 8,972.60 at the start of 2020.

So how did publicly held solution provider companies and distributors fare? Of the 25 companies on our watch list, only six recorded stock price increases between Dec. 31, 2019, and June 30, 2020, with 22 recording stock price declines—including two that have lost more than 50 percent of their value this year.

Here‘s a look at how some of the biggest publicly traded solution provider companies fared in the first half of 2020, starting with companies with the biggest gains in share price, based on stock closing prices on Dec. 31, 2019, and June 30, 2020.

Consolidated Communications

CEO: Bob Udell

Dec. 31, 2019 Close: $3.88

June 30, 2020 Close: $6.77

Change: +74.48%

For the first six months ended June 30 of 2020, Consolidated Communications, an internet, cable TV and phone services provider, reported revenue of $650.8 million, down 3.2 percent from $672.2 million in the first half of 2019. The company reported net income of $29.6 million for the six-month period compared with a $14.5 million loss one year earlier.

Consolidated Communications is No. 34 on the CRN Solution Provider 500.

EPAM Systems

CEO: Arkadiy Dobkin

Dec. 31, 2019 Close: $212.16

June 30, 2020 Close: $252.01

Change: +18.78%

EPAM Systems, No. 27 on the CRN Solution Provider 500, is an enterprise software design, development and consulting firm. The company is seen as a leader in the cloud business analytics services space.

For the first six months ended June 30 of 2020, EPAM reported revenue of $1.28 billion, up nearly 20 percent from $1.07 billion in the first six months of 2019. Net income for the six-month period was $152.2 million, up more than 27 percent from $119.5 million one year before.

Quality Technology Services

CEO: Chad Williams

Dec. 31, 2019 Close: $54.27

June 30, 2020 Close: $64.09

Change: +18.09%

In February QTS began development of a mega data center campus in Hillsboro, Ore., with the initial construction including a 158,000-square-foot data center with 85,000 square feet of leasable capacity and 27 megawatts of gross power capacity. The 9.2-acre site will eventually have five mega data centers totaling approximately 1.5 million square feet.

For the first six months ended June 30 of 2020, QTS reported revenue of $257.9 million, up 11 percent from $231.9 million in the first half of 2019. But net income for the six-month period was down 36 percent to $18.3 million compared with $28.7 million one year before.

QTS is No. 61 on the CRN Solution Provider 500.

Tyler Technologies

CEO: Lynn Moore Jr.

Dec. 31, 2019 Close: $300.02

June 30, 2020 Close: $346.88

Change: +15.62%

Tyler Technologies, a provider of software and services for the public sector, reported revenue for the first six months of 2020 ended June 30 of $547.6 million, up nearly 5 percent from $522.2 million in the first half of 2019. Net income for the six-month period was $101.4 million, up 71 percent from $59.3 million one year before.

Accenture

CEO: Julie Sweet

Dec. 31, 2019 Close: $210.57

June 30, 2020 Close: $214.72

Change: +1.97%

Accenture, No. 2 on the CRN Solution Provider 500, has continued its aggressive acquisition strategy in 2020. Since the start of the year Accenture has acquired several companies in IoT and processing technology for manufacturing and industrial use including PLM Systems and Calisto. Cybersecurity technology and expertise has also been on the company’s shopping list, acquiring startup Revolutionary Security and consulting firm Context Information Security—the latter for $139 million.

For Accenture’s fiscal 2020 third quarter ended May 31, the company reported revenue of $10.99 billion, down 1 percent from $11.10 billion in the fiscal 2019 third quarter. Net income for the quarter was $1.25 billion, down nearly 3 percent from $1.27 billion one year earlier.

Tech Data

CEO: Rich Hume

Dec. 31, 2019 Close: $143.60

June 30, 2020 Close: $144.90

Change: +0.91%

On Nov. 13 distributor Tech Data struck a deal to be acquired by private equity firm Apollo Global Management. The initial agreement called for Apollo to pay $130 per share, putting the deal’s value at $4.8 billion, but the deal was amended to boost the acquisition price to $145 per share, or about $6 billion total, after Tech Data received another offer.

The acquisition closed June 30, at which point public trading of Tech Data stock ended. Rich Hume continues to lead the distributor as CEO.

In May Tech Data reported the financial results of its fiscal 2021 first quarter ended April 30—its last as a public company. Revenue for the quarter was $8.18 billion, down 3 percent from $8.41 billion in the first quarter of fiscal 2020. Net income for the quarter was $48.1 million, down 13 percent from $55.4 million one year before.

Connection

CEO: Timothy McGrath

Dec. 31, 2019 Close: $49.66

June 30, 2020 Close: $46.36

Change: -6.65%

For the first quarter ended March 31 of 2020, Connection reported revenueof $632.9 million, up 1.3 percent from $624.9 million in the first quarter of 2019. Net income for the quarter was $12.7 million, up nearly 13 percent from $11.3 million one year before.

The company, No. 24 on the CRN Solution Provider 500, will report its second-quarter results on Aug. 10.

Synnex

CEO: Dennis Polk

Dec. 31, 2019 Close: $128.80

June 30, 2020 Close: $119.77

Change: -7.01%

On Jan. 9, Synnex unveiled a plan to separate into two independent companies, splitting off the Concentrix business that Synnex acquired in 2006. On March 25 Synnex put the plan on hold, citing the COVID-19 pandemic and subsequent economic downturn, but has since resumed its plan to spin off the business by the fourth quarter of this year.

For the first six months ended May 31 of fiscal 2020, Synnex reported revenue of $10.80 billion, down 3.3 percent from $10.97 billion in the first six months of fiscal 2019. Net income for the six-month period was $179.5 million, down 11 percent from $201.6 million one year earlier.

Unisys

CEO: Peter Altabef

Dec. 31, 2019 Close: $11.86

June 30, 2020 Close: $10.91

Change: -8.01%

On March 16 Unisys, No. 23 on the CRN Solution Provider 500, completed the $1.2 billion sale of its U.S. federal business to SAIC. The company will use the money largely to pay down debt and reduce pension obligations.

For the first six months ended June 30 of 2020, Unisys reported revenue of $954.2 million, down percent from $1.12 billion in the first six months of 2019. The company reported net income of $936.7 million (including $1.07 billion in income from discontinued operations) for the six-month period compared with net income of $6.8 million one year earlier.

SS&C Technologies

CEO: William Stone

Dec. 31, 2019 Close: $61.40

June 30, 2020 Close: $56.48

Change: -8.01%

On March 24 SS&C, a leading provider of IT solutions to the financial services industry, acquired Captricity, a developer of enterprise machine-learning paper-to-digital data transformation technology.

On May 18 SS&C completed its acquisition of Innovest Systems, a provider of internet-based technology for trust accounting, payments and unique asset servicing. The acquisition deal was announced April 30.

For the first six months ended June 30 of 2020, SS&C reported revenue of $2.31 billion, up more than 1 percent from $2.29 billion in the first half of 2019. The company reported net income of $268.7 million for the six-month period, up 33 percent from $201.9 million one year earlier.

Cognizant Technology Solutions

CEO: Brian Humphries

Dec. 31, 2019 Close: $62.02

June 30, 2020 Close: $56.82

Change: -8.38%

In May Cognizant said it was cutting its workforce, reportedly through executive layoffs and voluntary employee separations, as its business slowed due to the COVID-19 pandemic and continuing fallout from a Maze ransomware attack against its IT systems.

On June 1 Cognizant completed its acquisition of El-Technologies, a Paris-based digital transformation consultant and leading Salesforce specialist. Ten days later Cognizant completed its acquisition of Collaborative Solutions, one of the industry’s largest Workday service providers.

For the first six months ended June 30 of 2020, Cognizant, No. 6 on the CRN Solution Provider 500, reported revenue of $8.23 billion, down 0.3 percent from $8.25 billion in the first half of 2019. Net income for the six-month period was $728 million, down more than 23 percent from $950 million one year before.

Perspecta

CEO: Mac Curtis

Dec. 31, 2019 Close: $26.44

June 30, 2020 Close: $23.23

Change: -12.14%

Perspecta, which is focused on government and military IT solutions, was created in 2018 when DXC Technology spun off its public services business and merged it with government consultant Vencore and government background check services provider KeyPoint.

For all of fiscal 2020 ended March 31, Perspecta, No. 19 on the CRN Solution Provider 500, reported revenue of $4.50 billion, up nearly 12 percent from $4.03 billion in fiscal 2019. For the fiscal year the company reported a loss of $676 million compared with net income of $72 million in fiscal 2019. The loss included an impairment charge of $796 million in the fourth quarter related to goodwill and assets due to the U.S. Navy’s decision not to award the company a re-compete of the Next Generation Enterprise Network contract.

CACI International

CEO: John Mengucci

Dec. 31, 2019 Close: $249.99

June 30, 2020 Close: $216.88

Change: -13.24%

In June CACI was awarded a $1.5 billion contract, the single largest in the company’s history, to provide transport and cybersecurity IT services to the National Geospatial-Intelligence Agency.

For the first nine months ended March 31 of its fiscal 2020, CACI reported revenue of $4.22 billion, up 16.9 percent from $3.61 billion in the first nine months of fiscal 2019. Net income for the nine-month period was $227.7 million, up 5.6 percent from $215.6 million one year before.

CACI, No. 18 on the CRN Solution Provider 500, will report its fiscal 2020 fourth quarter and full year results on Aug. 13.

ManTech International

CEO: Kevin Phillips

Dec. 31, 2019 Close: $79.88

June 30, 2020 Close: $68.49

Change: -14.26%

On June 15 ManTech named Matt Tait as the company’s chief operating officer, effective July 1, reporting to President and CEO Kevin Phillips. The company also announced an organizational change to realign its two business groups, Mission Solutions & Services (MSS) and Mission, Cyber & Intelligence Solutions (MCIS) and create three business sectors: Intelligence, Defense and Federal Civilian.

For the first six months ended June 30 of 2020, ManTech reported revenue of $1.24 billion, up nearly 20 percent from $1.04 billion in the first half of 2019. Net income for the six-month period was $58.6 million, up more than 29 percent from $45.3 million one year earlier.

ePlus Technology

CEO: Mark Marron

Dec. 31, 2019 Close: $84.29

June 30, 2020 Close: $70.68

Change: -16.15%

For all of fiscal 2020 ended March 31, ePlus reported revenue of $1.59 billion, up nearly 16 percent from $1.37 billion in fiscal 2019. Net income for the year was $69.1 million, up more than 9 percent from $63.2 million one year before.

On May 20 ePlus, No. 33 on the CRN Solution Provider 500, announced a stock repurchase program to buy back up to 500,000 outstanding shares of common stock over the next 12 months.

For its fiscal 2021 first quarter ended June 30, ePlus reported sales of $355.0 million, down 6.9 percent from $381.4 million in the first quarter of fiscal 2020. Net income for the quarter was $17.4 million, up 7.2 percent from $16.2 million one year before.

CDW

CEO: Christine Leahy

Dec. 31, 2019 Close: $142.84

June 30, 2020 Close: $116.18

Change: -18.66%

On July 1, just after the period covered by this analysis, CDW announced that it had acquired IGNW, a provider of cloud-native services, software development and data orchestration capabilities. IGNW provides services across all the major cloud platforms and is a leading Cisco Systems Digital Solutions Integrator Partner.

For the first half of 2020 ended June 30, CDW, No. 5 on the CRN Solution Provider 500, reported revenue of $8.75 billion, up 1.9 percent from $8.59 billion in the first half of 2019. Net income for the six-month period was $357.0 million, up 2.2 percent from $349.5 million one year before.

Arrow Electronics

CEO: Michael Long

Dec. 31, 2019 Close: $84.74

June 30, 2020 Close: $68.69

Change: -18.94%

For the first six months of 2020 ended June 27, distributor Arrow Electronics reported revenue of just under $13.0 billion, down 10.4 percent from $14.5 billion in the first half of 2019. The company reported net income of $182.3 million for the six-month period compared with a loss of $408.2 million one year earlier, which included a second-quarter $698 million impairment charge.

Computer Task Group

CEO: Filip Gyde

Dec. 31, 2019 Close: $5.18

June 30, 2020 Close: $4.03

Change: -22.20%

In March Computer Task Group, No. 71 on the CRN Solution Provider 500, acquired StarDust, a Marseille, France-based provider of testing and quality assurance for digital services.

For the first six months ended June 26 of 2020, CTG reported revenue of $176.1 million, down 10.9 percent from $197.6 million in the first six months of 2019. Net income for the six-month period was $2.9 million, up more than 84 percent from $1.6 million one year before.

Perficient

CEO: Jeffrey Davis

Dec. 31, 2019 Close: $46.07

June 30, 2020 Close: $35.78

Change: -22.34%

In January Perficient, No. 55 on the CRN Solution Provider 500, expanded its presence in the health-care IT market with the acquisition of MedTouch, a $13 million, 50-person consulting firm that provides digital transformation services to the health-care industry.

In June Perficient acquired Productora de Software (PSL), a Medellin, Columbia-based “nearshore” software development service provider. Also in June, Perficient earned Google Cloud Premier Partner status.

For the first half ended June 30 of 2020, Perficient reported revenue of $291.9 million, up nearly 6 percent from $275.7 million in the first half of 2016. Net income for the six-month period was $15.6 million, flat with net income one year earlier.

CGI

CEO: George Schindler

Dec. 31, 2019 Close: $83.71

June 30, 2020 Close: $63.00

Change: -24.74%

For the first nine months ended June 30 of fiscal 2020, Montreal-based CGI reported revenue of CAN$9.24 billion (U.S. $6.96 billion), up 1 percent from CAN$9.15 billion (U.S. $6.89 billion) in the first nine months of fiscal 2019.

Net earnings for the nine-month period were CAN$865.9 million (U.S. $652.3 million), down nearly 8 percent from CAN$939.1 million (U.S. $707.5 million) one year before.

CGI is No. 12 on the CRN Solution Provider 500.

Insight Enterprises

CEO: Kenneth Lamneck

Dec. 31, 2019 Close: $70.29

June 30, 2020 Close: $49.20

Change: -30.00%

Insight Enterprises, No. 15 on the CRN Solution Provider 500, entered 2020 having completed its $581 million acquisition of PCM in August 2019.

For the first six months ended June 30 of 2020, Insight reported revenue of $4.11 billion, up 17 percent from $3.52 billion in the first six months of 2019. Net earnings for the six-month period were $80.3 million, down 10 percent from $89.3 million one year before.

Avnet

CEO: Phil Gallagher

Dec. 31, 2019 Close: $42.44

June 30, 2020 Close: $27.89

Change: -34.28%

On Aug. 3, after the period covered by this analysis, William Amelio stepped down as the distributor’s CEO, effective immediately. No reason was given for his departure. Amelio had held the position since July 2016.

Avnet named Phil Gallagher as interim CEO. He had been serving as global president of Avnet’s electronic components business since April 2017.

For its fiscal 2020 fourth quarter ended June 27, Avnet reported revenue of $4.16 billion, down 11 percent from $4.68 billion in the fourth quarter of fiscal 2019. Net income for the quarter was $52.2 million compared with a $31.8 million loss one year earlier.

For all of fiscal 2020, Avnet reported revenue of $17.63 billion, down nearly 10 percent from $19.52 billion in fiscal 2019. The company reported a loss of $31.1 million for fiscal 2020 compared with net income of $176.3 million one year before.

ScanSource

CEO: Mike Baur

Dec. 31, 2019 Close: $36.95

June 30, 2020 Close: $24.09

Change: -34.80%

On Aug. 20, 2019, ScanSource said it planned to divest $623 million in business operations outside the U.S. in a move to push the company deeper into digital distribution and away from the legacy distribution model.

In May the company warned about the potential impacts of the pandemic and said sales in April were down 22 percent year over year. On July 23, after the period covered by this analysis, ScanSource said it planned to cut 200 jobs as part of a $30 million expense reduction program, citing the impact of the COVID-19 pandemic on its business. The company also said it would exit its Canpango Salesforce deployment business.

For the first nine months ended March 31 of fiscal 2020, ScanSource reported revenue of $2.85 billion, down 2.1 percent from $2.91 billion in revenue reported for the first nine months of fiscal 2019. Net income for the nine-month period was $24.6 million, down 46.5 percent from $46.0 million one year earlier.

The company expects to report its fiscal 2020 fourth quarter and full year results on Aug. 25.

DXC Technology

CEO: Mike Salvino

Dec. 31, 2019 Close: $37.59

June 30, 2020 Close: $16.50

Change: -56.11%

On March 10 DXC Technology, No. 3 on the CRN Solution Provider 500, struck a deal to sell its U.S. state and local health and human services business to Veritas Capital for $5.0 billion. DXC will use the proceeds to pay down debt.

On July 20, after the period covered by this analysis, DXC reached an agreement to sell its health-care software provider business to Dedalus group, a European health-care and diagnostic software company, for $525 million. That sale is expected to close by March 2021.

For the fiscal 2021 first quarter ended June 30, DXC reported revenue of $4.50 billion, down nearly 8 percent from $4.89 billion in the first quarter of fiscal 2020. For the quarter DXC reported a $205 million loss compared with net income of $163 million one year before.

Conduent

CEO: Cliff Skelton

Dec. 31, 2019 Close: $6.20

June 30, 2020 Close: $2.39

Change: -61.45%

On Feb. 27, 2020, Cliff Skelton was appointed Conduent’s permanent CEO. Previously the company’s president and chief operating officer, Skelton was named interim CEO in August 2019 after then-CEO Ashok Vemuri stepped down.

For the first six months ended June 30 of 2020, Conduent reported revenue of $2.07 billion, down nearly 9 percent from $2.27 billion in the first half of 2019. Conduent reported a $100 million loss for the six-month period compared with a $1.34 billion loss one year before.

Conduent is No. 20 on the CRN Solution Provider 500.