Ducommun (DCO) AI Stock Analysis

• Market Cap: $1.88B
• Dividend Yield: N/A
• Average Volume (3M): 170.48K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: 3.16%
• EPS Growth: -213.56%
• Country: US
• Employees: 2,180
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.05
• Shares Outstanding: 14,986,947
• 10 Day Avg. Volume: 196,247
• 30 Day Avg. Volume: 170,481
• PEG Ratio: 0.20
• Price to Book (P/B): 2.15
• Price to Sales (P/S): 1.72
• P/FCF Ratio: -29.22
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 2.64
• Enterprise Value/Gross Profit: 9.82
• Enterprise Value/Ebitda: 104.05
• 1Y Price Target: $143.60
• Price Target Upside: 14.74% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 4.4
• Revenue Forecast (FY): $884.50M

• Rating: 59 Neutral
• Price Target: $146.00 ▲(16.66% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is held back primarily by weak 2025 profitability and negative operating/free cash flow despite solid revenue growth and a much stronger balance sheet. Offsetting factors include constructive 2026 guidance with strong defense bookings/backlog and improving adjusted margins, plus supportive technical uptrend signals, while valuation remains pressured by GAAP losses.

Positive Factors

Consistent Revenue Growth

Nineteen consecutive quarters of YoY revenue expansion shows durable demand and customer retention across cycles. This steady top-line trajectory supports capacity utilization, long-term supplier/contracts planning, and underpins achievable multi-year targets, reducing reliance on single-program wins.

Very Low Leverage / Strong Equity Base

A materially reduced debt burden and sizable equity cushion enhance financial resilience. Low leverage increases flexibility to absorb shocks, fund working capital or M&A, and maintain operations during cash volatility, making capital structure supportive of multi‑year strategic initiatives.

Robust Defense Backlog & Bookings

A large RPO and sustained book-to-bill above 1 provide multi-quarter revenue visibility, particularly from defense programs which are higher-margin and less cyclical. Strong missile bookings and backlog support predictable revenue conversion and margin sustainability over the 2–6 month horizon and beyond.

Negative Factors

Negative Operating & Free Cash Flow

A swing to negative operating and free cash flow materially reduces internal funding for capex, working capital and strategic investments. If cash generation does not normalize, the company will rely more on credit or equity, constraining flexibility and increasing execution risk for multi-year targets.

Large Litigation Cash Impact

A large settlement that materially drained cash highlights operational and legal risk that can divert funds from growth initiatives. Even if largely one-time, the scale of outflow affected leverage and liquidity, potentially delaying M&A or capital investments needed to meet long-term revenue and margin goals.

Dependence on Defense Timing & M&A

The company's growth and margin road map relies on the timing of prime/OEM awards, government ordering cadence, and inorganic deals. This creates structural timing and execution risk: delays in defense ramps or difficulty executing M&A can defer revenue, margin expansion, and target realization beyond planning horizons.

Ducommun Business Overview & Revenue Model

Company Description

Ducommun Incorporated provides engineering and manufacturing products and services primarily to the aerospace and defense, industrial, medical, and other industries in the United States. It operates through two segments, Electronic Systems and Structural Systems. The Electronic Systems segment provides cable assemblies and interconnect systems; printed circuit board assemblies; higher-level electronic, electromechanical, and mechanical components and assemblies, as well as lightning diversion systems; and radar enclosures, aircraft avionics racks, shipboard communications and control enclosures, shipboard communications and control enclosures, printed circuit board assemblies, cable assemblies, wire harnesses, interconnect systems, lightning diversion strips, surge suppressors, conformal shields, and other assemblies. It also supplies engineered products, including illuminated pushbutton switches and panels for aviation and test systems; microwave and millimeter switches and filters for radio frequency systems and test instrumentation; and motors and resolvers for motion control. In addition, this segment provides engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components; structural assembly products, such as winglets, engine components, and fuselage structural panels; and metal and composite bonded structures and assemblies comprising aircraft wing spoilers, large fuselage skins, rotor blades on rotary-wing aircraft and components, flight control surfaces, engine components, ammunition handling systems, and magnetic seals. It serves commercial aircraft, military fixed-wing aircraft, military and commercial rotary-wing aircraft, and space programs, as well as industrial, medical, and other end-use markets. The company was founded in 1849 and is headquartered in Santa Ana, California.

How the Company Makes Money

Ducommun generates revenue primarily through the sale of its aerospace and defense-related products and services. The company's revenue model is based on long-term contracts and relationships with key customers, which include prominent aerospace and defense manufacturers. Key revenue streams include the manufacturing of precision components, assembly services, and engineering solutions. The company also benefits from the growing demand for advanced aerospace technologies and increased defense spending, which contribute to its earnings. Strategic partnerships with major defense contractors and ongoing investments in research and development further enhance Ducommun’s competitive position and revenue potential.

Ducommun Financial Statement Overview

Summary

Revenue has grown steadily to a record $825M, and the balance sheet is notably stronger with very low leverage (debt-to-equity ~0.07). However, 2025 saw a sharp setback with a swing to a net loss and negative operating and free cash flow, reducing near-term financial quality despite balance-sheet resilience.

Income Statement

Revenue has grown steadily over the period (from $629M in 2020 to $825M in 2025), but profitability deteriorated sharply in the latest year. After positive net income in 2024 ($31.5M), 2025 swung to a net loss (-$33.9M) and negative operating profit, despite a higher gross margin (~26.9% vs ~25.1% in 2024). The multi-year margin profile is mixed, with generally modest net margins outside of 2021’s unusually high profitability, making the recent loss a key near-term concern.

Balance Sheet

Leverage improved materially, with total debt down significantly versus prior years and debt-to-equity falling to a low ~0.07 in 2025 (from ~0.40 in 2024 and higher earlier). Equity remains sizable (~$662M) relative to assets (~$1.19B), supporting balance-sheet resilience. The main weakness is returns: 2025 delivered a negative return on equity, reflecting the earnings decline rather than balance-sheet stress.

Cash Flow

Cash generation weakened meaningfully in 2025, with operating cash flow turning negative (-$33.4M) and free cash flow also negative (-$48.6M), a sharp reversal from positive free cash flow in 2022–2024. While free cash flow was higher than net income in 2025 due to the net loss (ratio above 1), the key issue is the absolute cash burn and the steep deterioration versus the prior year, which reduces financial flexibility if it persists.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	824.73M	786.55M	756.99M	712.54M	645.41M
Gross Profit	221.62M	197.26M	163.19M	144.30M	142.46M
EBITDA	2.52M	85.65M	69.72M	76.31M	210.06M
Net Income	-33.94M	31.50M	15.93M	28.79M	135.54M
Balance Sheet
Total Assets	1.19B	1.13B	1.12B	1.02B	978.74M
Cash, Cash Equivalents and Short-Term Investments	45.29M	37.14M	42.86M	46.25M	76.32M
Total Debt	345.83M	272.14M	295.59M	282.84M	320.59M
Total Liabilities	524.12M	443.57M	484.82M	495.55M	504.13M
Stockholders Equity	662.11M	682.53M	636.09M	525.96M	474.60M
Cash Flow
Free Cash Flow	-48.64M	20.05M	11.54M	12.99M	-17.43M
Operating Cash Flow	-33.41M	34.18M	31.07M	32.68M	-565.00K
Investing Cash Flow	-13.12M	-13.91M	-133.50M	-19.24M	57.75M
Financing Cash Flow	54.68M	-26.00M	99.05M	-43.51M	-37.34M

Ducommun Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 125.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DCO, the sentiment is Neutral. The current price of 125.15 is below the 20-day moving average (MA) of 127.78, above the 50-day MA of 118.29, and above the 200-day MA of 96.64, indicating a neutral trend. The MACD of 2.98 indicates Positive momentum. The RSI at 50.30 is Neutral, neither overbought nor oversold. The STOCH value of 22.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DCO.

Ducommun Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ATRO	63 Neutral	$2.29B	71.09	14.92%	―	6.19%	52.10%
DCO	59 Neutral	$1.88B	-41.88	-5.01%	―	3.16%	-213.56%
AIR	59 Neutral	$4.03B	21.70	7.23%	―	17.59%	-56.15%
AIRO	56 Neutral	$306.46M	-17.03	-0.76%	―	―	―
MRCY	55 Neutral	$4.69B	-73.03	-2.08%	―	8.63%	72.72%

Ducommun Corporate Events

Ducommun Settles Guaymas Fire Subrogation Claim for $4M

On January 7, 2026, Ducommun Incorporated entered into a confidential settlement agreement to resolve a previously disclosed subrogation claim arising from a June 2020 fire at its performance center in Guaymas, Mexico, which had been pursued in an Arizona arbitration by the insurer of the entity providing labor and facilities for that site after payments to customer Williams International Co., LLC. Following a December 9, 2025 mediation, the parties agreed to dismiss the arbitration with prejudice and mutually release all past, present and future claims related to the fire in exchange for a $4 million payment by Ducommun, which the company plans to expense in the quarter ended December 31, 2025 and fund from existing cash, while denying any admission of liability and stating it believes no material claims remain outstanding from the incident aside from a potential Mexican insurer claim it considers time-barred.

The most recent analyst rating on (DCO) stock is a Buy with a $124.00 price target. To see the full list of analyst forecasts on Ducommun stock, see the DCO Stock Forecast page.