Portfolio: Zacks Earnings Certain Proxy

ePlus was just recently added to the flagship Zacks Earnings Certain Proxy, and we are highlighting the company this week. This is a mid‑cap IT solutions provider that’s riding enterprise and mid‑market demand for security, cloud, and AI‑driven infrastructure, while steadily shifting from low‑margin hardware resale to higher‑margin services and solutions. In fiscal 2026, management now expects net sales to grow 20–22% and gross profit 19–21%, with adjusted EBITDA up 41–43% versus 2025—driven by strong AI‑related spend across compute, storage, networking, and cybersecurity.

The investment case is that you’re buying an under‑followed “picks and shovels” play on cloud and AI at a reasonable multiple, backed by a net‑cash balance sheet (~$400M cash, no net debt) and operating leverage as services scale. ePlus’s moat is execution and relationship‑based: deep vendor certifications, a strong security practice, and embedded managed services make it hard for customers to switch, while its size lets it be more nimble than giant integrators but more capable than local players. If management sustains double‑digit revenue growth and expands margins as guided, earnings and free cash flow per share can compound well ahead of the broader IT channel over the next several years.