Over the past six months, Insight Enterprises’s shares (currently trading at $144.40) have posted a disappointing 8.3% loss, well below the S&P 500’s 6.9% gain. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.

Is now the time to buy Insight Enterprises, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Do We Think Insight Enterprises Will Underperform?

Even with the cheaper entry price, we don't have much confidence in Insight Enterprises. Here are three reasons why you should be careful with NSIT and a stock we'd rather own.

1. Long-Term Revenue Growth Flatter Than a Pancake

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Insight Enterprises struggled to consistently increase demand as its $8.43 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and signals it’s a low quality business.

2. Recent EPS Growth Below Our Standards

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

Insight Enterprises’s EPS grew at a weak 1.6% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 8.7% annualized revenue declines and tells us management adapted its cost structure in response to a challenging demand environment.

3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Insight Enterprises has shown weak cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.5%, subpar for a business services business.

Final Judgment

We see the value of companies helping their customers, but in the case of Insight Enterprises, we’re out. After the recent drawdown, the stock trades at 14.5× forward P/E (or $144.40 per share). This valuation tells us a lot of optimism is priced in - we think there are better stocks to buy right now. We’d recommend looking at a top digital advertising platform riding the creator economy.

Stocks We Like More Than Insight Enterprises

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.