Distribution Solutions Group (DSGR)
NASDAQ:DSGR
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Distribution Solutions Group
(NASDAQ:DSGR)
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Rating:50Neutral
Price Target:
$27.00
▼(-1.35% Downside)
Action:Reiterated
Date:05/31/26
Overall score reflects mixed fundamentals: strong revenue growth and positive recent free cash flow are offset by very low profitability, leverage and low returns on equity. Technicals are neutral, while valuation is a major headwind due to the extremely high P/E and lack of dividend support.
Positive Factors
Revenue Growth and Scale
Sustained top-line expansion to roughly $2.0B provides structural advantages: larger scale improves purchasing leverage, broadens customer reach across MRO and test-equipment markets, and creates a bigger base to absorb cost variability, supporting durable revenue resilience.
Negative Factors
Very Thin Profitability
Extremely low net margins and recent losses indicate limited earnings cushion versus cost shocks. Even with revenue growth, marginal profitability constrains ability to self-fund expansion, limits retained earnings accumulation, and raises sensitivity to demand or supplier-cost disruptions.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth and Scale
Sustained top-line expansion to roughly $2.0B provides structural advantages: larger scale improves purchasing leverage, broadens customer reach across MRO and test-equipment markets, and creates a bigger base to absorb cost variability, supporting durable revenue resilience.
Read all positive factors
Distribution Solutions Group (DSGR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.28B
Dividend YieldN/A
Average Volume (3M)72.01K
Price to Earnings (P/E)231.6
Beta (1Y)1.01
Revenue Growth7.07%
EPS Growth361.18%
CountryUS
Employees4,400
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.12
Shares Outstanding46,195,164
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 Cap1.60
Enterprise Value/Revenue1.02
Enterprise Value/Gross Profit3.15
Enterprise Value/Ebitda13.76
Forecast
1Y Price Target
$33.00Price Target Upside20.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.88
Revenue Forecast (FY)$2.05B
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, M...
How the Company Makes Money
DSGR primarily makes money by selling products and value-added distribution services to business customers across its operating segments. (1) Product distribution revenue: The company generates revenue from the resale of MRO supplies, industrial c...
Distribution Solutions Group Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 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
56
Neutral
Balance Sheet
50
Neutral
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.00B | 1.98B | 1.80B | 1.57B | 1.15B | 520.29M |
| Gross Profit | 649.75M | 662.04M | 613.77M | 555.46M | 390.90M | 130.28M |
| EBITDA | 148.59M | 155.64M | 128.99M | 143.75M | 82.42M | 30.68M |
| Net Income | 5.47M | 8.35M | -7.33M | -8.97M | 7.41M | -5.05M |
Balance Sheet | ||||||
| Total Assets | 1.79B | 1.75B | 1.73B | 1.55B | 1.22B | 491.36M |
| Cash, Cash Equivalents and Short-Term Investments | 52.73M | 61.75M | 66.48M | 83.93M | 24.55M | 14.67M |
| Total Debt | 849.41M | 819.11M | 831.09M | 649.05M | 471.93M | 248.31M |
| Total Liabilities | 1.14B | 1.10B | 1.09B | 888.73M | 652.62M | 325.59M |
| Stockholders Equity | 648.11M | 649.35M | 640.54M | 661.60M | 563.00M | 165.77M |
Cash Flow | ||||||
| Free Cash Flow | 32.90M | 43.35M | 33.26M | 77.61M | -31.13M | -3.46M |
| Operating Cash Flow | 68.25M | 83.85M | 56.45M | 102.29M | -11.03M | 10.32M |
| Investing Cash Flow | -46.26M | -29.49M | -229.68M | -278.52M | -126.69M | -41.38M |
| Financing Cash Flow | -39.85M | -64.27M | 159.30M | 250.41M | 148.46M | 34.67M |
Distribution Solutions Group Technical Analysis
Positive
27.37
Price Trends
27.10
Positive
27.57
Positive
28.36
Negative
Market Momentum
0.10
Negative
56.54
Neutral
70.18
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 27.37 is above the 20-day moving average (MA) of 27.22, above the 50-day MA of 27.10, and below the 200-day MA of 28.36, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 56.54 is Neutral, neither overbought nor oversold. The STOCH value of 70.18 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 | $11.59B | 29.30 | 21.64% | 0.70% | 7.54% | 6.04% | |
69 Neutral | $1.17B | 15.66 | 23.95% | 3.48% | 7.23% | 19.38% | |
69 Neutral | $18.24B | 26.76 | 13.70% | 0.72% | 11.16% | 6.33% | |
66 Neutral | $2.50B | 27.77 | 17.90% | ― | 10.48% | 11.27% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $6.54B | 31.53 | 15.00% | 3.96% | 2.16% | -2.18% | |
50 Neutral | $1.28B | 231.63 | 0.84% | ― | 7.07% | 361.18% |
* Industrials Sector Average
DSGR
Distribution Solutions Group
27.41
-0.21
-0.76%
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Distribution Solutions Group Corporate Events
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.