Financial Data and Key Metrics Changes - For Q3, the company reported a 6% year-over-year decline in net sales, while gross profit and adjusted EBITDA both increased by 6% [15][21] - Gross profit margin improved to 14.2%, and adjusted EBITDA margin rose to 4.97% [15] - Non-GAAP net income increased by 16%, and non-GAAP diluted EPS rose by 25% [16] Business Line Data and Key Metrics Changes - Specialty Technology Solutions segment saw a 7% year-over-year decline in net sales, but gross profits increased by 3% due to a higher mix of recurring revenue [17] - The Intelisys and Advisory segment experienced a 16% year-over-year increase in net sales and gross profits, with adjusted EBITDA growing by 20% [18] Market Data and Key Metrics Changes - Most technologies in North America, including mobility, barcode, networking, physical security, payment terminals, and wireless connectivity, grew year-over-year [7][17] - The business in Brazil faced challenges due to macroeconomic issues and foreign exchange impacts, but it represents less than 10% of total revenues [45][46] Company Strategy and Development Direction - The company is focused on driving profitable growth both organically and through strategic acquisitions, with a higher capital allocation priority for acquisitions [14][20] - The Integrated Solutions Group was created to provide high-margin products and services, and a new business development team will be launched to support emerging technology companies [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's resilience and highlighted the importance of free cash flow generation [15][19] - The company updated its FY 2025 outlook to approximately $3 billion in net sales and adjusted EBITDA between $140 million and $145 million [21] Other Important Information - The company announced a new share repurchase authorization of $200 million, in addition to the remaining $42 million from the previous authorization [20] - The company is actively pursuing acquisition targets that align with its strategy for growth and margin improvement [20][76] Q&A Session Summary Question: Guidance for Q4 and trends in April - Management discussed expectations for sequential growth in Q4, citing improvements in netted down revenue and historical averages [27][28] Question: Share repurchase authorization and capital allocation - Management clarified that both acquisitions and share repurchases are priorities, with a focus on maintaining a target net debt leverage of one to two times adjusted EBITDA [33][36] Question: Demand trends in Brazil - Management noted macroeconomic challenges and foreign exchange impacts affecting performance in Brazil, which is less than 10% of total revenues [45][46] Question: Channel exchange and new suppliers - Management highlighted the success of the channel exchange in recruiting new suppliers, particularly in the AI space [49][58] Question: Competitive environment for acquisitions - Management indicated a favorable environment for acquisitions, with a wide range of targets available and a disciplined approach to valuations [75] Question: Impact of large orders on gross margins - Management acknowledged that large deals typically have a lower margin profile but emphasized the benefits of acquired businesses and recurring revenues [77] Question: Free cash flow guidance - Management explained that timing of sales in Q4 could impact free cash flow, but they remain confident in achieving at least $70 million [78]

Financial Data and Key Metrics Changes - For Q3, the company reported a net sales decline of 6% year over year, while gross profit and adjusted EBITDA both increased by 6% [13][14] - Gross profit margin improved to 14.2%, and adjusted EBITDA margin rose to 4.97% [13] - Non-GAAP net income increased by 16%, and non-GAAP diluted EPS rose by 25% [14] Business Line Data and Key Metrics Changes - Specialty Technology Solutions segment saw net sales decline by 7% year over year, but gross profits increased by 3% due to a higher mix of recurring revenue [14][15] - The Intelisys and Advisory segment experienced a 16% increase in net sales and gross profits, with adjusted EBITDA growing by 20% year over year [15][16] Market Data and Key Metrics Changes - Most technologies in North America, including mobility, barcode, networking, physical security, payment terminals, and wireless connectivity, grew year over year [6][14] - The business in Brazil faced challenges due to macroeconomic issues and foreign exchange impacts, but it remains less than 10% of total revenues [11][42] Company Strategy and Development Direction - The company is focused on driving profitable growth both organically and through strategic acquisitions, with a higher capital allocation priority for acquisitions [12][18] - The Integrated Solutions Group was created to provide high-margin products and services, and a new business development team will be launched to support emerging technology companies [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's resilience and highlighted the importance of free cash flow generation [13][17] - The company updated its FY 2025 outlook to approximately $3 billion in net sales and adjusted EBITDA between $140 million and $145 million [19] Other Important Information - The company announced a new share repurchase authorization of $200 million, in addition to the remaining $42 million from the previous authorization [18] - The company is actively pursuing acquisitions that align with its strategy and maintain a target net debt leverage of one to two times adjusted EBITDA [18][32] Q&A Session Summary Question: Guidance for Q4 and trends in April - Management discussed expectations for sequential growth in Q4, citing improvements in large deals and netted down revenue comparisons from the previous year [21][24] Question: Share repurchase authorization and capital allocation - Management clarified that the larger share repurchase authorization reflects confidence in acquisitions while maintaining a balanced approach to capital allocation [27][30] Question: Demand trends in Brazil - Management noted that Brazil is facing macroeconomic challenges and foreign exchange impacts, but profitability remains insulated due to cost management [42][43] Question: Channel exchange and SaaS revenue streams - Management highlighted the success of the channel exchange in recruiting new suppliers, particularly in the AI space, which is contributing to revenue growth [45][47] Question: Top line performance and competitive environment - Management acknowledged weaknesses in certain areas while emphasizing growth in specific technologies, attributing some performance discrepancies to netted down revenue [50][52] Question: Large orders and gross margins - Management indicated that large deals typically have a lower margin profile, but the acquired businesses and recurring revenues help offset this impact [72][74] Question: Free cash flow guidance - Management explained that free cash flow guidance remains at least $70 million, with potential fluctuations based on the timing of sales within the quarter [75]

Core Insights - ScanSource (SCSC) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and up from $0.69 per share a year ago, representing an earnings surprise of 11.69% [1] - The company posted revenues of $704.85 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 11.21%, and down from $752.6 million year-over-year [2] - ScanSource shares have declined approximately 23.9% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $826.7 million, and for the current fiscal year, it is $3.33 on revenues of $3.14 billion [7] - The estimate revisions trend for ScanSource is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Industrial Services industry, to which ScanSource belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Financial Performance - Net sales for the quarter ended March 31, 2025, were $704.8 million, a decrease of 6.3% compared to $752.6 million for the same quarter in 2024[19] - Gross profit for the quarter was $100.2 million, representing a gross margin of 14.2%, compared to $94.5 million and a gross margin of 12.6% in the prior year[19] - Net income for the quarter was $17.4 million, an increase of 36.5% from $12.8 million in the same quarter last year[19] - The company reported a basic net income per share of $0.75 for the quarter, up from $0.51 in the prior year[19] - Total revenue for the quarter ended March 31, 2025, was $665,229,000, with recurring revenue contributing $39,618,000[50] - Operating income for the quarter was $22.3 million, an increase of 27.5% from $17.5 million in the same quarter of 2024[95] - Comprehensive income for the quarter was $27.1 million, compared to $8.0 million in the same quarter of 2024[20] Assets and Liabilities - Total assets decreased to $1.725 billion as of March 31, 2025, down from $1.779 billion as of June 30, 2024[16] - Total liabilities decreased to $823.5 million from $854.8 million over the same period[16] - Total current assets decreased to $1.31 billion from $1.40 billion, a decline of 6.7%[16] - Shareholders' equity as of March 31, 2025, was $901.7 million, down from $924.3 million at June 30, 2024[16] - The total debt as of March 31, 2025, was $138,024,000, a decrease from $144,056,000 at June 30, 2024[60] Cash Flow and Expenditures - Cash provided by operating activities for the nine months ended March 31, 2025, was $104,704,000, down from $316,908,000 in 2024, indicating a significant decline of about 66.9%[25] - The company reported capital expenditures of $5,769,000 for the nine months ended March 31, 2025, compared to $7,285,000 in 2024, reflecting a decrease of approximately 20.8%[25] - Total cash and cash equivalents at the end of the period on March 31, 2025, were $146,287,000, down from $159,050,000 at the end of March 2024, a decrease of about 8.5%[25] - The company incurred a net cash used in financing activities of $83,424,000 for the nine months ended March 31, 2025, compared to $203,941,000 in 2024, showing a reduction of approximately 59.0%[25] Segment Performance - Specialty Technology Solutions segment sales were $678.4 million, down 7.0% from $729.8 million year-over-year[95] - Intelisys & Advisory segment sales increased by 16.0% to $26.4 million compared to $22.8 million in the prior year[95] - The company has realigned its operating segments effective July 1, 2024, into Specialty Technology Solutions and Intelisys & Advisory to enhance its hybrid distribution growth strategy[30] Restructuring and Future Plans - The company plans to continue focusing on market expansion and new product development as part of its growth strategy[1] - The Company expects annualized savings of approximately $10.0 million and $10.5 million from restructuring programs initiated in January 2024 and September 2024, respectively[110] Tax and Compliance - The effective tax rate for the quarter ended March 31, 2025, was 28.0%, compared to 28.7% for the same quarter in 2024, reflecting a decrease of 2.4%[105] - The Company had approximately $1.2 million of total gross unrecognized tax benefits as of March 31, 2025, slightly up from $1.1 million at June 30, 2024[107] Foreign Currency and Derivatives - The company experienced a foreign currency translation adjustment gain of $10.1 million for the quarter[20] - The foreign currency translation adjustment resulted in an accumulated other comprehensive loss of $121,653,000 as of March 31, 2025[55] - The Company recorded net foreign exchange derivative contract losses of $1,446 thousand for the quarter ended March 31, 2025, compared to gains of $526 thousand in the same quarter of 2024[70] Goodwill and Intangible Assets - Goodwill increased to $228,835,000 as of March 31, 2025, from $206,301,000 at June 30, 2024, due to additions of $22,776,000[57] - The net identifiable intangible assets rose to $67,815,000 as of March 31, 2025, from $37,634,000 at June 30, 2024[58] Lease Obligations - Operating lease right-of-use assets increased to $11,155,000 as of March 31, 2025, from $9,057,000 as of June 30, 2024, representing a 23.2% increase[99] - Total operating lease costs for the quarter ended March 31, 2025, were $1,511,000, slightly up from $1,507,000 in the same quarter of 2024[100] - Cash paid for lease liabilities during the nine months ended March 31, 2025, was $3,039,000, down from $4,019,000 in the same period of 2024, indicating a 24.4% reduction[100]

Financial Performance - Net sales for Q3 FY25 totaled $704.8 million, a decrease of 6.3% year-over-year[2] - Gross profit increased by 6.1% year-over-year to $100.2 million, with a gross profit margin of 14.2% compared to 12.6% in the prior-year quarter[5] - GAAP net income for Q3 FY25 was $17.4 million, or $0.74 per diluted share, representing a 36.1% increase from the prior-year quarter[7] - Operating income for Q3 FY25 was $22.3 million, an increase of 27.3% year-over-year[6] - Net sales for the quarter ended March 31, 2025, were $704,847 thousand, a decrease of 6.3% compared to $752,599 thousand in the same quarter of 2024[27] - Gross profit for the quarter was $100,202 thousand, up from $94,481 thousand year-over-year, reflecting a gross margin improvement[27] - Net income for the quarter was $17,431 thousand, representing an increase of 36.5% from $12,806 thousand in the prior year[27] - Adjusted EBITDA for Q3 FY25 rose by 5.9% to $35.1 million, with an adjusted EBITDA margin of 4.97%[7] - Adjusted EBITDA for the quarter was $35,053 thousand, compared to $33,095 thousand in the same quarter of 2024, indicating a year-over-year growth of 5.9%[32] - Operating income for Q1 2025 was $22,339 thousand, while net income was $17,431 thousand, resulting in a diluted EPS of $0.74[42] Revenue Composition - Recurring revenue increased by 41.0% year-over-year, contributing to the overall revenue mix[4] - Specialty Technology Solutions segment net sales were $678,433 thousand, a decline of 7.0% compared to $729,834 thousand in the same quarter of 2024[35] - Non-GAAP net sales in the United States and Canada were $647,642 thousand, reflecting a 3.5% decline from $671,246 thousand in the prior year[39] - Net sales in Brazil reported a significant decline of 41.1%, dropping to $47,883 thousand from $81,353 thousand year-over-year[39] - Acquisitions impacted net sales by $9,322 thousand in Q1 2025, with no such impact reported in Q1 2024[39] Cash Flow and Assets - Cash and cash equivalents as of March 31, 2025, were $146.3 million, with total debt of $138.0 million[8] - Free cash flow for the first nine months of FY25 was $98.9 million (non-GAAP)[8] - Free cash flow for the quarter ended March 31, 2025, was $64,638 thousand, compared to $157,732 thousand in the same quarter of 2024[40] - Total current assets decreased to $1,310,268 thousand as of March 31, 2025, down from $1,404,699 thousand at June 30, 2024[25] - Total liabilities decreased to $823,462 thousand from $854,777 thousand, indicating a reduction in financial obligations[25] - Cash and cash equivalents at the end of the period were $146,287 thousand, down from $185,460 thousand at the beginning of the period[30] - The company reported a net cash provided by operating activities of $104,704 thousand, significantly lower than $316,908 thousand in the prior year[30] Shareholder Actions - A new $200 million share repurchase authorization was announced, supplementing the existing authorization[12] Other Financial Metrics - The Adjusted return on invested capital (Adjusted ROIC) for the period was 13.6%, up from 12.1% in the previous year[32] - SG&A expenses for Q1 2025 were $69,698 thousand, compared to $66,574 thousand in Q1 2024[42] - The company experienced a capital loss from the sale of its UK-based intY business, which did not result in a tax provision due to the absence of offsetting capital gains[42] - The company reported a foreign exchange impact of $8,705 thousand on consolidated net sales for Q1 2025[39]

Core Viewpoint - ScanSource reported quarterly earnings of $0.85 per share, missing the Zacks Consensus Estimate of $0.89 per share, representing an earnings surprise of -4.49% [1][2] Financial Performance - The company posted revenues of $747.5 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 10.78%, and a decline from year-ago revenues of $879.58 million [2] - Over the last four quarters, ScanSource has surpassed consensus EPS estimates only once [2] Stock Performance - ScanSource shares have increased by approximately 5.4% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.79 on revenues of $778.8 million, and for the current fiscal year, it is $3.51 on revenues of $3.24 billion [7] - The estimate revisions trend for ScanSource is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Industrial Services industry, to which ScanSource belongs, is currently in the bottom 15% of over 250 Zacks industries, which may negatively impact stock performance [8]

Financial Performance - Net sales for the quarter ended December 31, 2024, were $747,497,000, a decrease of 15.5% compared to $884,792,000 for the same quarter in 2023[18]. - Gross profit for the six months ended December 31, 2024, was $203,342,000, down from $207,256,000 in the same period of 2023, reflecting a decline of 1.9%[18]. - Net income for the quarter ended December 31, 2024, was $17,053,000, a decrease of 47.9% compared to $32,726,000 for the same quarter in 2023[18]. - Net income for the six months ended December 31, 2024, was $34,028,000, compared to $48,158,000 for the same period in 2023, reflecting a decrease of approximately 29.4%[27]. - Basic earnings per share for the quarter ended December 31, 2024, were $0.72, compared to $1.31 for the same quarter in 2023, a decline of approximately 45%[57]. - Comprehensive income for the quarter was $(1,425) thousand, compared to $33,866 thousand in the prior year, indicating a significant decline[20]. Assets and Liabilities - Total current assets decreased to $1,283,765,000 as of December 31, 2024, from $1,404,699,000 as of June 30, 2024, representing a decline of 8.6%[15]. - Total liabilities decreased to $801,867,000 as of December 31, 2024, from $854,777,000 as of June 30, 2024, a reduction of 6.2%[15]. - The company’s total assets decreased to $1,702,529,000 as of December 31, 2024, from $1,779,032,000 as of June 30, 2024, a decrease of 4.3%[15]. - Total debt as of December 31, 2024, was $139,899,000, a decrease from $144,056,000 as of June 30, 2024[63]. - The company’s retained earnings increased to $1,031,934,000 as of December 31, 2024, from $1,013,738,000 as of June 30, 2024, an increase of 1.8%[15]. Cash Flow and Investments - The company reported a net cash provided by operating activities of $38,642,000 for the six months ended December 31, 2024, a significant decrease from $156,757,000 in the prior year[27]. - Cash and cash equivalents at the end of the period were $110,520,000, down from $185,460,000 at the beginning of the period, indicating a decrease of 40.4%[27]. - The company reported a net cash used in investing activities of $58,452,000, compared to a net cash provided of $13,113,000 in the previous year[27]. - The company incurred a cash outflow of $56,673,000 for business acquisitions during the six months ended December 31, 2024[27]. Segment Performance - The Specialty Technology Solutions segment reported sales of $723.277 million for the quarter ended December 31, 2024, down from $861.514 million in the same quarter of 2023, representing a decrease of approximately 16.1%[95]. - The Intelisys & Advisory segment achieved sales of $24.220 million for the quarter ended December 31, 2024, compared to $23.278 million in the same quarter of 2023, reflecting an increase of approximately 4.0%[95]. - Operating income for the Specialty Technology Solutions segment was $14.077 million for the quarter ended December 31, 2024, down from $19.696 million in the same quarter of 2023, a decrease of approximately 28.0%[95]. Restructuring and Expenses - The company reported a restructuring expense of $5,381,000 for the six months ended December 31, 2024, compared to no such expense in the same period of 2023[18]. - The company executed restructuring programs in January and September 2024, expected to yield annualized savings of approximately $20.5 million in selling, general, and administrative expenses[112]. - The company recorded depreciation and amortization expenses of $8.131 million for the quarter ended December 31, 2024, compared to $7.258 million in the same quarter of 2023, an increase of approximately 12.0%[95]. Tax and Compliance - The Company recorded a discrete net tax benefit of $3.0 million for the quarter ended December 31, 2024, compared to a $3.8 million benefit in the same quarter of 2023[106]. - The effective tax rate for the quarter ended December 31, 2024, was 13.5%, down from 18.3% in the same quarter of 2023[107]. - The Company was in compliance with all covenants under the Amended Credit Agreement as of December 31, 2024[67]. Future Outlook and Strategy - The company plans to focus on market expansion and new product development to drive future growth[18]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures[40].

Financial Performance - Net sales for Q2 FY25 totaled $747.5 million, a decrease of 15.5% year-over-year[4] - Gross profit increased by 1.0% year-over-year to $101.7 million, with a gross profit margin of 13.6%, up from 11.4% in the prior-year quarter[5] - Operating income for Q2 FY25 was $18.4 million, down 31.2% from $26.8 million in the prior-year quarter[6] - GAAP net income decreased by 47.9% to $17.1 million, or $0.70 per diluted share, compared to $32.7 million, or $1.29 per diluted share, in Q2 FY24[7] - Non-GAAP net income for Q2 FY25 was $20.7 million, or $0.85 per diluted share, compared to $21.6 million, or $0.85 per diluted share, in the prior-year quarter[7] - Adjusted EBITDA for Q2 FY25 decreased by 8.2% to $35.3 million, representing 4.72% of net sales[7] - Net income for the quarter was $17,053 thousand, down 47.9% from $32,726 thousand in the prior year[29] - Adjusted EBITDA for the quarter was $35,299 thousand, compared to $38,459 thousand in the same quarter of 2023, reflecting a decrease of 5.6%[34] - Diluted EPS for the quarter was $0.70, down from $1.29 in the same quarter last year, representing a decrease of 45.7%[46] Revenue and Sales - Recurring revenue grew by 31.2% year-over-year, contributing to 32.4% of gross profit[5] - Net sales for the quarter ended December 31, 2024, were $747,497 thousand, a decrease of 15.5% compared to $884,792 thousand in the same quarter of 2023[29] - Non-GAAP net sales in the United States and Canada were $678,538,000, reflecting a 14.7% decline from $795,382,000 in the prior year[42] - Net sales in Brazil decreased by 32.5% to $60,386,000 in Q2 2024 from $89,410,000 in Q2 2023[42] - The company reported a foreign exchange impact of $10,718,000 on consolidated net sales for the quarter ended December 31, 2024[42] Cash Flow and Assets - Free cash flow for the first six months of FY25 was $34.3 million, with share repurchases totaling $52.3 million[8] - Cash and cash equivalents at the end of the period were $110,520 thousand, down from $185,460 thousand at the beginning of the period[31] - Free cash flow for the quarter ended December 31, 2024, was $(8,164,000), a significant decrease from $60,675,000 in the same quarter of 2023[43] - The company experienced a significant decline in GAAP operating cash flow, reporting $(6,190,000) for the quarter compared to $63,224,000 in the same quarter of the previous year[43] Expenses and Liabilities - The company reported a restructuring charge of $313 thousand for the quarter, with total selling, general and administrative expenses increasing to $73,920 thousand from $66,921 thousand year-over-year[29] - Total current assets decreased to $1,283,765 thousand from $1,404,699 thousand, a decline of 8.6%[27] - Total liabilities decreased to $801,867 thousand from $854,777 thousand, a reduction of 6.2%[27] - SG&A expenses for Q2 2024 were $73,920,000, an increase from $66,921,000 in Q2 2023[46] Guidance and Future Outlook - For FY25, the company reaffirms guidance of net sales between $3.1 billion and $3.5 billion[10] - The adjusted return on invested capital (Adjusted ROIC) for the quarter was 13.3%, slightly up from 13.2% in the previous year[34]

Industry Overview - The Zacks Industrial Services industry provides industrial equipment products and MRO services, serving customers across commercial, government, healthcare, and manufacturing sectors [3] - The industry's products include power tools, hand tools, lubricants, and personal protective equipment, which are used in production and plant maintenance but are not directly related to customers' core products [4] - The manufacturing sector contributes around 70% to the industry's revenues, with customer activity trends historically correlated to changes in the Industrial Production Index [5] Industry Trends - The manufacturing sector has been in a prolonged contraction, with the Institute for Supply Management's manufacturing index remaining below 50% for most of 2024, indicating contraction [6] - The New Orders Index showed expansion in November and December 2024 after seven consecutive months of contraction, but consistent growth has not been sustained since May 2022 [7] - The industry is experiencing significant inflation levels, including higher prices for labor, freight, and fuel, leading to pricing actions and cost-cutting measures [8] - E-commerce is a key growth driver, with global e-commerce revenues expected to reach $4,791 billion in 2025 and a CAGR of 7.83% between 2025 and 2029 [10] Industry Performance and Valuation - The Industrial Services industry has underperformed its sector and the S&P 500, growing 9.6% over the past year compared to the sector's 14.9% and the S&P 500's 24.3% [13] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 28.52X, higher than the S&P 500's 13.96X and the Industrial Products sector's 19.84X [14] Key Companies - **Eos Energy Enterprises**: Projects 2025 revenues between $150 million and $190 million, driven by increased production and supply chain improvements [15][16] - **ClearSign Technologies**: Received a significant follow-on purchase order in December 2024 and expanded its partnership with Zeeco, Inc., positioning the company for solid growth [17][18][19] - **Grainger**: Delivers robust results with margin improvements and strong operating performance, focusing on e-commerce and digital capabilities [21][22] - **ScanSource**: Shifting business mix and cost-saving efforts are driving stronger earnings and cash flow, with recent acquisitions enhancing its advisory channel model [24][25] Growth Catalysts - The rise in e-commerce activities is a key catalyst for the industry, with companies leveraging strategies to capitalize on this demand [2] - Companies are focusing on lowering costs, increasing productivity, and investing in automation and digitization to aid growth [2]

Group 1 - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for momentum stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score [2] Group 2 - ScanSource (SCSC) is highlighted as a strong candidate for momentum investing, having experienced a 7.3% price increase over the past four weeks [3] - SCSC has shown a significant 11.3% price gain over the last 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.44, suggesting it moves 44% more than the market, indicating fast-paced momentum [4] Group 3 - SCSC holds a Momentum Score of B, suggesting it is an opportune time to invest in the stock to leverage its momentum [5] - The stock has achieved a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - SCSC is trading at a Price-to-Sales ratio of 0.40, indicating it is undervalued, as investors pay only 40 cents for each dollar of sales [6] Group 4 - SCSC is positioned for further growth, with potential for fast-paced momentum [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting a broader opportunity for investors [7] - Various Zacks Premium Screens are available to assist in identifying winning stock picks based on different investing styles [8]