Want to see DSGR full AI Analyst Report?
Top Page
Distribution Solutions Group
(NASDAQ:DSGR)
Select Model
Select Model
Rating:56Neutral
Price Target:
$36.00
▲(4.32% Upside)
Action:Reiterated
Date:08/06/26
The score is primarily constrained by middling financial quality—very low net profitability, uneven earnings history, and volatile free-cash-flow trends—despite strong revenue growth. Technicals are supportive but appear overextended (very high RSI), while valuation is a major negative due to the extremely high P/E. The take-private deal is a meaningful positive catalyst and provides a price reference, but it does not fully offset the underlying profitability and valuation concerns.
Positive Factors
Material revenue scale expansion
Sustained multi-year revenue growth to ~$2.05B indicates durable commercial traction across industrial and safety distribution channels. Larger scale supports purchasing leverage, broader customer coverage, greater fixed-cost absorption, and funding for network and digital investments over the next 2–6 months.
Negative Factors
Very thin net profitability
Extremely low net margins and recent losses indicate limited earnings power after operating costs and interest. This structural thinness makes the business highly sensitive to margin compression, reducing ability to generate durable returns and build retained earnings over time.
Read all positive and negative factors
Positive Factors
Negative Factors
Material revenue scale expansion
Sustained multi-year revenue growth to ~$2.05B indicates durable commercial traction across industrial and safety distribution channels. Larger scale supports purchasing leverage, broader customer coverage, greater fixed-cost absorption, and funding for network and digital investments over the next 2–6 months.
Read all positive factors
Distribution Solutions Group (DSGR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.60B
Dividend YieldN/A
Average Volume (3M)72.01K
Price to Earnings (P/E)292.2
Beta (1Y)0.98
Revenue Growth7.07%
EPS Growth361.18%
CountryUS
Employees4,300
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.19
Shares Outstanding46,255,420
10 Day Avg. Volume70,849
30 Day Avg. Volume72,014
Financial Highlights & Ratios
PEG Ratio-0.72
Price to Book (P/B)1.96
Price to Sales (P/S)0.64
P/FCF Ratio29.29
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$35.00Price Target Upside1.42% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)0.6
Revenue Forecast (FY)$2.06B
Distribution Solutions Group Business Overview & Revenue Model
Company Description
Lawson Products, Inc. specializes in supplying distinctive products to a diverse clientele spanning industrial, commercial, institutional, and governmental sectors, specifically catering to their maintenance, repair, and operations (MRO) requireme...
How the Company Makes Money
DSGR primarily makes money by distributing products to business customers and earning a gross margin (the spread between its purchase cost from manufacturers/suppliers and its selling price to customers). Key revenue streams generally include: (1)...
Distribution Solutions Group Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: strong top-line growth (FY revenue +9.8%), robust cash generation, improving capabilities at high-margin businesses (notably Gexpro Services), and deliberate investments in leadership, digital tools, and M&A that position the company for longer-term improvement. Offsetting these positives were meaningful margin compression, a decline in non-GAAP EPS, several one-time and timing-related cost pressures in Q4 (healthcare, bad debt, recruiting/onboarding), operational challenges in Lawson’s small-account base and Canada integration, and near-term margin headwinds expected in Q1 2026. Management emphasizes a multi-quarter recovery path driven by execution and reinvestment, so the narrative is constructive on strategy but cautious on short-term profitability.Positive Updates
Record Full-Year Revenue Growth
Total revenue of $1,980,000,000 for FY2025, up 9.8% year-over-year, driven by organic average daily sales growth of 3.6% and $121.5M incremental revenue from 2024 acquisitions.
Negative Updates
Adjusted EBITDA and Margin Compression
Full-year adjusted EBITDA was $175.2M or 8.9% of sales, down 80 basis points from 9.7% in 2024; Q4 adjusted EBITDA was $35.4M or 7.4% of sales, reflecting near-term margin pressure.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Revenue Growth
Total revenue of $1,980,000,000 for FY2025, up 9.8% year-over-year, driven by organic average daily sales growth of 3.6% and $121.5M incremental revenue from 2024 acquisitions.
Read all positive updates
Company Guidance
The company guided to continued near-term margin pressure in Q1 2026 but a recovery and margin expansion through the middle of the year, noting January–February ADS were up low single digits year‑over‑year (flat vs Q4) with Q1 selling days unchanged at 63; management expects Q2 and Q3 margins to run above the 2025 adjusted‑EBITDA average of 8.9% (recall 2025 adjusted EBITDA was $175.2M or 8.9% of $1,980.0M revenue and Q4 EBITDA was $35.4M or 7.4%). Financial liquidity and capital plans support the plan: $469.0M total available liquidity, $75.3M cash, net debt leverage ~3.5x, an expanded credit facility with $700M term debt and a $400M revolver, 2025 cash from operations of $84.0M, free‑cash‑flow conversion ~85%, planned 2026 CapEx of $25–30M, and an active M&A/tuck‑in pipeline plus ~$30M remaining on a $67.5M share‑repurchase authorization.Distribution Solutions Group Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
63
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.05B | 1.98B | 1.80B | 1.57B | 1.15B | 520.29M |
| Gross Profit | 671.45M | 662.04M | 613.77M | 555.46M | 390.90M | 130.28M |
| EBITDA | 149.40M | 155.64M | 128.99M | 143.75M | 82.42M | 30.68M |
| Net Income | 8.96M | 8.35M | -7.33M | -8.97M | 7.41M | -5.05M |
Balance Sheet | ||||||
| Total Assets | 1.82B | 1.75B | 1.73B | 1.55B | 1.22B | 491.36M |
| Cash, Cash Equivalents and Short-Term Investments | 75.48M | 61.75M | 66.48M | 83.93M | 24.55M | 14.67M |
| Total Debt | 845.47M | 819.11M | 831.09M | 649.05M | 471.93M | 248.31M |
| Total Liabilities | 1.16B | 1.10B | 1.09B | 888.73M | 652.62M | 325.59M |
| Stockholders Equity | 654.72M | 649.35M | 640.54M | 661.60M | 563.00M | 165.77M |
Cash Flow | ||||||
| Free Cash Flow | 1.28M | 43.35M | 33.26M | 77.61M | -31.13M | -3.46M |
| Operating Cash Flow | 36.58M | 83.85M | 56.45M | 102.29M | -11.03M | 10.32M |
| Investing Cash Flow | -69.13M | -29.49M | -229.68M | -278.52M | -126.69M | -41.38M |
| Financing Cash Flow | 35.70M | -64.27M | 159.30M | 250.41M | 148.46M | 34.67M |
Distribution Solutions Group Technical Analysis
Positive
34.51
Price Trends
29.88
Positive
28.40
Positive
28.28
Positive
Market Momentum
1.59
Positive
84.11
Negative
60.58
Neutral
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 34.51 is above the 20-day moving average (MA) of 33.55, above the 50-day MA of 29.88, and above the 200-day MA of 28.28, indicating a bullish trend. The MACD of 1.59 indicates Positive momentum. The RSI at 84.11 is Negative, neither overbought nor oversold. The STOCH value of 60.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DSGR.
Distribution Solutions Group Risk Analysis
Distribution Solutions Group disclosed 32 risk factors in its most recent earnings report. Distribution Solutions Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Distribution Solutions Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $12.76B | 32.17 | 21.64% | 0.56% | 7.54% | 6.04% | |
76 Outperform | $2.43B | 27.94 | 18.27% | ― | 10.48% | 11.27% | |
75 Outperform | $1.37B | 18.52 | 26.97% | 3.08% | 7.23% | 19.38% | |
72 Outperform | $6.89B | 29.81 | 16.55% | 2.77% | 4.41% | 16.62% | |
66 Neutral | $16.74B | 23.56 | 14.06% | 0.57% | 12.51% | 13.23% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $1.60B | 292.22 | 0.84% | ― | 7.07% | 361.18% |
* Industrials Sector Average
DSGR
Distribution Solutions Group
34.88
4.11
13.36%
AIT
Applied Industrial Technologies
359.90
99.21
38.06%
DXPE
DXP Enterprises
192.36
76.93
66.64%
MSM
MSC Industrial
122.92
41.11
50.25%
GIC
Global Industrial Company
39.13
5.90
17.74%
WCC
Wesco International
363.74
161.63
79.97%
Distribution Solutions Group Corporate Events
Delistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Distribution Solutions Group to Be Taken Private
Positive
Jul 17, 2026
On July 15, 2026, Distribution Solutions Group agreed to be acquired and taken private by newly formed entities controlled by LKCM Headwater Investments, which already own about 79% of the company. The deal will see minority shareholders receive $...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Distribution Solutions Group Stockholders Endorse 2026 Governance Proposals
Positive
May 14, 2026
On May 14, 2026, Distribution Solutions Group, Inc. held its 2026 Annual Meeting of Stockholders, with 92.7% of eligible shares represented in person or by proxy. Stockholders elected seven directors to the board with strong majorities, reflecting...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.