MeritValue

SCANSOURCE, INC.

SCSCdata completeness 100%17 fiscal years on file
The thesis, from the filings

SCANSOURCE, INC. earns about 9% on invested capital, below its ~9% cost of capital, and has bought back 7% of its shares over 5 years — no moat visible in the numbers. The estimate methods put fair value between $33.5 and $61.95 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.15B1$3.53B2$3.79B3$3.26B3$3.04B3
Net income$10.8M4$88.8M5$89.8M6$77.1M6$71.5M6
Operating cash flow$116.8M7−$124.4M8−$35.8M9$371.6M9$112.3M9
Capital expenditure$2.36M10$6.85M11$9.98M12$8.56M12$8.29M12
Free cash flow (derived)$114.4M7−$131.2M8−$45.7M9$363.1M9$104.1M9
Total debt$143.2M13$135.3M14$150.9M15$144M16$136.1M16
Cash & equivalents$62.7M17$38M18$36.2M19$185.5M20$126.2M20
Diluted shares25.5M25.8M25.4M25.2M23.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$380.22
your share of equity
Profit it earned you last year
$30.01
Free cash flow it threw off
$43.65
Debt you’d be carrying
$57.11

10 shares is a claim on $380.22 of net worth that earned you $30.01 and generated $43.65 of cash last year, against $57.11 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
9% avg · 5y
FY21 6%FY22 10%FY23 10%FY24 9%FY25 8%

It earned about 9% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
−7% shares · 5y

Share count is down 7% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $33.5 and $61.95 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$57.25
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$104.1M
DCF · Growth Exit 5Y
$61.95
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$104.1M
Earnings Power Value
$33.5
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$77.1M
  • growthAssumed0.0%
Graham Number
$50.66
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $61.95
The three cases
Bear0.0%$61.95
Base0.0%$61.95
Bull5.0%$77.05

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-06-30 · accession 0000918965-23-000023 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-06-30 · accession 0000918965-24-000029 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-06-30 · accession 0000918965-25-000029 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-06-30 · accession 0000918965-23-000023 (NetIncomeLoss)
  5. 10-K · period ending 2022-06-30 · accession 0000918965-24-000029 (NetIncomeLoss)
  6. 10-K · period ending 2023-06-30 · accession 0000918965-25-000029 (NetIncomeLoss)
  7. 10-K · period ending 2021-06-30 · accession 0000918965-23-000023 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  8. 10-K · period ending 2022-06-30 · accession 0000918965-24-000029 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  9. 10-K · period ending 2023-06-30 · accession 0000918965-25-000029 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  10. 10-K · period ending 2021-06-30 · accession 0000918965-23-000023 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-06-30 · accession 0000918965-24-000029 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-06-30 · accession 0000918965-25-000029 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-06-30 · accession 0000918965-22-000018 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-06-30 · accession 0000918965-23-000023 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-06-30 · accession 0000918965-24-000029 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-06-30 · accession 0000918965-25-000029 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-06-30 · accession 0000918965-22-000018 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-06-30 · accession 0000918965-23-000023 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-06-30 · accession 0000918965-24-000029 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-06-30 · accession 0000918965-25-000029 (CashAndCashEquivalentsAtCarryingValue)