Technology distributor ScanSource is scheduled to report its latest earnings before the market opens Thursday, with investors assessing whether the company can maintain momentum after a strong previous quarter. ScanSource generated $766.8 million in revenue in its last reported period, representing an 8.8% year-over-year increase and exceeding analysts’ expectations. Earnings per share also came in above consensus.

The upcoming report presents a more challenging backdrop. Analysts expect revenue to decline 1.3% year over year, compared with the 8.9% growth recorded in the same quarter last year. That anticipated slowdown makes the company’s ability to manage demand, margins and operating execution particularly important for investors evaluating the stock.

Stable Estimates Offer a Mixed Signal

Analyst estimates have remained generally stable over the past 30 days, suggesting that Wall Street is not currently anticipating a major change in ScanSource’s trajectory ahead of the release. However, the company’s recent history provides a reason for caution, as ScanSource has missed Wall Street’s revenue expectations multiple times over the past two years.

This combination of stable estimates and a projected revenue decline creates a relatively low-growth setup heading into the announcement. A stronger-than-expected result could therefore have an outsized effect on investor sentiment if management demonstrates that the anticipated slowdown is temporary.

The market will likely pay close attention to whether ScanSource can match or exceed expectations while providing evidence that demand across its technology distribution and solutions businesses remains resilient.

Peer Performance Raises the Earnings Bar

Recent results from comparable companies provide a more constructive backdrop for the sector. Insight Enterprises reported 14.7% year-over-year revenue growth and exceeded analysts’ expectations by 10.5%, while Connection delivered 12.4% revenue growth and topped estimates by 11.3%.

Investor reactions were also positive. Insight Enterprises shares rose 6.4% following its results, while Connection’s stock was unchanged. Across the IT distribution and solutions segment, shares have gained approximately 6% on average over the past month.

ScanSource has moved in the opposite direction, falling 3.6% during the same period to $52.29. The stock currently carries an average analyst price target of $57, implying additional upside if the company delivers a solid report. Going forward, investors will be watching revenue performance against the expected decline, the company’s ability to exceed earnings expectations and management’s commentary on demand. A meaningful upside surprise could help ScanSource close some of its recent performance gap with peers, while another revenue miss could reinforce concerns about slowing growth.