Distribution Solutions Group (DSGR) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: N/A
• Average Volume (3M): 63.98K
• Price to Earnings (P/E): 361.3
• Beta (1Y): 0.89
• Revenue Growth: 13.48%
• EPS Growth: N/A
• Country: US
• Employees: 4,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.11
• Shares Outstanding: 46,275,093
• 10 Day Avg. Volume: 51,663
• 30 Day Avg. Volume: 63,975
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 3.19
• Enterprise Value/Ebitda: 14.31
• 1Y Price Target: $41.00
• Price Target Upside: 35.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 65 Neutral
• Price Target: $32.00 ▲(5.58% Upside)

Distribution Solutions Group's overall score is driven by strong financial performance and positive earnings call insights, highlighting revenue growth and operational improvements. However, the high P/E ratio suggests overvaluation, and technical indicators show neutral to bearish trends, which moderate the overall score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand and effective market penetration, supporting long-term business expansion and stability.

Cash Flow Management

Effective cash flow management and debt reduction enhance financial flexibility, allowing for strategic investments and resilience.

EBITDA Margin Improvement

Improved EBITDA margins reflect operational efficiency and cost management, contributing to sustained profitability and competitive edge.

Negative Factors

Profitability Concerns

Low net profit margins indicate potential issues in cost control, which could hinder long-term profitability and shareholder returns.

Canadian Market Challenges

Economic and tariff uncertainties in Canada may impact revenue and margin stability, posing risks to regional operations.

Military Sales Decline

Declining military sales could affect revenue streams and market positioning, requiring strategic adjustments to mitigate impact.

Distribution Solutions Group Business Overview & Revenue Model

Company Description

Lawson Products, Inc. sells and distributes specialty products to the industrial, commercial, institutional, and government maintenance, repair, and operations market. It sells its products to customers in the United States, Puerto Rico, Canada, Mexico, and the Caribbean. The company was founded in 1952 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Distribution Solutions Group generates revenue primarily through its distribution services, which include the sale of products and logistics solutions to a broad customer base. Key revenue streams include wholesale product sales, transportation and logistics fees, and value-added services such as inventory management and consulting. The company also benefits from strategic partnerships with suppliers and manufacturers, allowing it to offer competitive pricing and exclusive products. Additionally, DSGR's focus on technology-driven solutions enables it to streamline operations for clients, resulting in long-term contracts and repeat business, further bolstering its earnings.

Distribution Solutions Group Financial Statement Overview

Summary

Distribution Solutions Group shows strong revenue growth and improved operational efficiency, though profitability remains a concern with tight net margins. The balance sheet reflects a healthier leverage position with improved equity ratios, while cash flow management shows strong operational cash generation but requires better control over free cash flow.

Income Statement

Distribution Solutions Group shows strong revenue growth with a 22.71% increase from 2023 to TTM (Trailing-Twelve-Months). The gross profit margin is robust at 33.85% for TTM, indicating efficient production and sales processes. However, the net profit margin is low at 0.22% for TTM, suggesting challenges in cost management and profitability. EBIT and EBITDA margins have improved over the years, indicating better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has decreased significantly to 0.23 in TTM, showing a solid reduction in leverage and improved financial stability. The return on equity (ROE) is low at 0.66% in TTM, reflecting challenges in generating returns for shareholders. The equity ratio has improved to 37.06% in TTM, indicating a stable financial position with a strong equity base.

Cash Flow

Free cash flow shows a decrease from 2023 to TTM, with a negative growth rate of -10.58%, indicating potential issues in cash generation. The operating cash flow to net income ratio is high at 13.37 in TTM, demonstrating strong cash generation relative to net income. However, further improvement in free cash flow management is needed to enhance financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.93B	1.80B	1.57B	1.15B	417.73M	351.59M
Gross Profit	641.25M	613.77M	551.88M	390.90M	219.24M	186.54M
EBITDA	142.90M	55.95M	104.36M	82.42M	30.68M	28.14M
Net Income	4.26M	-7.33M	-8.97M	7.41M	9.41M	15.11M
Balance Sheet
Total Assets	1.75B	1.73B	1.55B	1.22B	256.16M	256.30M
Cash, Cash Equivalents and Short-Term Investments	47.43M	66.48M	83.93M	24.55M	4.18M	28.39M
Total Debt	827.21M	831.09M	649.05M	461.97M	27.21M	10.31M
Total Liabilities	1.10B	1.09B	888.73M	652.62M	123.15M	133.88M
Stockholders Equity	649.38M	640.54M	661.60M	563.00M	133.01M	122.42M
Cash Flow
Free Cash Flow	38.24M	42.77M	77.61M	-31.13M	-2.74M	30.84M
Operating Cash Flow	56.98M	56.45M	102.29M	-11.03M	5.45M	32.53M
Investing Cash Flow	-139.30M	-229.68M	-278.52M	-126.69M	-41.19M	-3.99M
Financing Cash Flow	87.03M	159.30M	250.41M	148.46M	10.66M	-5.77M

Distribution Solutions Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.31
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSGR, the sentiment is Positive. The current price of 30.31 is above the 20-day moving average (MA) of 29.14, below the 50-day MA of 30.60, and above the 200-day MA of 29.33, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 56.04 is Neutral, neither overbought nor oversold. The STOCH value of 90.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DSGR.

Distribution Solutions Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DXPE	80 Outperform	$1.82B	22.38	20.33%	―	13.93%	48.25%
GIC	79 Outperform	$1.34B	20.49	22.72%	2.94%	-1.58%	-5.62%
WCC	78 Outperform	$10.39B	17.20	13.78%	0.81%	1.30%	-1.09%
AIT	77 Outperform	$9.82B	25.68	22.24%	0.67%	1.88%	2.91%
MSM	75 Outperform	$4.85B	25.16	14.34%	3.79%	-1.35%	-22.24%
DSGR	65 Neutral	$1.37B	361.34	0.65%	―	13.48%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Distribution Solutions Group Corporate Events

Distribution Solutions Group’s Mixed Sentiment in Q2 Earnings Call

The recent earnings call of Distribution Solutions Group, Inc. (DSG) painted a picture of mixed sentiment, marked by strong financial performance and strategic growth initiatives. The company reported impressive revenue increases and improvements in EBITDA margins, underscoring its robust operational capabilities. However, challenges such as the Canadian market’s struggles, declines in military sales, and revenue drops in the TestEquity Group due to tariffs and economic uncertainty were notable lowlights.

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