Distribution Solutions Group: Strategic Growth and Acquisition-Driven Revenue Boost Justify Buy Rating

Barrington analyst Kevin Steinke maintained a Buy rating on Distribution Solutions Group (DSGR – Research Report) today and set a price target of $39.00.

Kevin Steinke has given his Buy rating due to a combination of factors that highlight Distribution Solutions Group’s strategic execution and growth potential. The company reported a notable 14.9% year-over-year increase in revenue for Q1/25, driven significantly by acquisitions, particularly the acquisition of Source Atlantic. Despite some revenue falling slightly below estimates due to challenges in specific segments like the Canada Branch and TestEquity, the overall growth trajectory remains positive.
Furthermore, the Gexpro Services segment demonstrated strong performance with a 23% year-over-year increase in average daily sales, benefiting from robust demand in key markets such as renewable energy and aerospace. While the Lawson Products segment faced challenges with a decline in organic sales, it showed sequential improvement and is actively expanding its sales representative headcount. These factors, combined with DSG’s strategic focus on enhancing productivity and efficiency for its customers, underpin Steinke’s confidence in the company’s potential, justifying the Buy rating.

According to TipRanks, Steinke is a 5-star analyst with an average return of 12.8% and a 54.92% success rate. Steinke covers the Industrials sector, focusing on stocks such as Huron Consulting, Distribution Solutions Group, and Quad/Graphics.