Q3: Tech Leaders v. Laggards
Laggards hit 5-year EV/EBITDA high
Hi everyone,
This week we have an update on our Tech Leaders vs. Laggards index. We’ve scrubbed through the financials of our 20 publicly traded B2B distributors and are excited to unpack the results with you. We compare Gross Margin, stock prices, EV/EBITDA and more!
As a refresher on the Leaders v. Laggards index, the Tech Leaders cohort is comprised of 10 publicly traded B2B Distributors who invest in digital commerce and publicly report on their digital commerce results to investors. The Laggards cohort does not report on digital commerce because it isn’t a key priority.
For more information, read our past articles introducing the index here:
The first newsletter looked at pricing and valuations
Our second newsletter looked at % of digital commerce sales and gross margins
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Laggards’ Gross Margin Declines
The Leaders’ gross margin has remained stable for not just the past few quarters, but the past few years. Ever since 2022, the Tech Leaders’ gross margin has hovered around 33%. Meanwhile, the Laggards’ gross margin has been more volatile – peaking at 29.2% in Q1 of 2024 and then falling back down to 27% in the last couple quarters.
Here’s the difference between the Leaders’ and the Laggards’ gross margin. The differential peaked in 2023 with the Leaders’ gross margin being over 6% higher than the Laggards’.
