Insight Enterprises (NSIT) is back in focus after its latest earnings update, where record gross profit and wider margins came alongside a modest revenue decline and new AI focused partnerships and platform launches.

The share price has reacted quickly to the earnings news and AI partnerships, with a 1 day share price return of 3.51% and a 7 day share price return of 9.10% as investors reassess Insight Enterprises’ growth and risk profile. This comes even though the 1 year total shareholder return shows a 44.95% decline and the 3 year total shareholder return shows a 26.98% decline, indicating that longer term holders have had a very different experience.

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With earnings moving one way, the share price moving another, and the stock trading below analyst targets and some intrinsic value estimates, investors may ask whether this represents a buying opportunity or whether the market is already pricing in future growth.

Most Popular Narrative: 23.9% Undervalued

With Insight Enterprises closing at $92.27 against a widely followed fair value of $121.25, the main narrative sees a wide valuation gap built on specific growth and margin assumptions.

The rapid adoption of artificial intelligence and the increasing urgency for enterprises to modernize IT infrastructures, especially to support AI workloads, could drive significant multi-year hardware and services demand, directly benefiting Insight's revenue and positioning the company for an upward earnings re-rating as macro uncertainties subside.

Curious what earnings profile needs to sit behind a valuation this far above today’s price? The narrative focuses on accelerating profits, steadier margins, and a future earnings multiple that looks very different to where the stock trades now.

Result: Fair Value of $121.25 (UNDERVALUED)

However, there are clear risks too, including slower enterprise spending on AI projects and clients buying more services directly from cloud vendors. This could challenge this valuation case.

Build Your Own Insight Enterprises Narrative

If you are not fully on board with this storyline, or simply prefer to stress test the numbers yourself, you can build a tailored Insight Enterprises thesis in just a few minutes using our narrative tools: Do it your way.

A great starting point for your Insight Enterprises research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.