Ducommun (DCO) AI Stock Analysis

• Market Cap: $1.35B
• Dividend Yield: N/A
• Average Volume (3M): 123.83K
• Price to Earnings (P/E): 34.7
• Beta (1Y): 0.70
• Revenue Growth: 2.42%
• EPS Growth: 72.72%
• Country: US
• Employees: 2,180
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.88
• Shares Outstanding: 14,923,743
• 10 Day Avg. Volume: 162,982
• 30 Day Avg. Volume: 123,833
• 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: 1.13
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 7.49
• Enterprise Value/Ebitda: 17.75
• 1Y Price Target: $104.67
• Price Target Upside: 12.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 73 Outperform
• Price Target: $102.00 ▲(9.20% Upside)

Ducommun's overall stock score is driven by strong financial performance and positive earnings call insights, particularly in the defense segment. Technical indicators support a bullish trend, although valuation concerns due to a high P/E ratio slightly temper the outlook. The absence of a dividend yield also impacts the valuation score.

Positive Factors

Revenue Growth

Consistent revenue growth for 17 consecutive quarters demonstrates Ducommun's strong market position and ability to capitalize on defense sector demand.

Defense Segment Performance

Strong growth in the defense segment, particularly in missiles and radar, highlights Ducommun's competitive edge in high-demand areas, supporting long-term stability.

Cash Flow Improvement

Improved cash flow and reduced interest expenses enhance financial flexibility, enabling Ducommun to invest in growth opportunities and manage debt effectively.

Negative Factors

Commercial Aerospace Decline

Decline in commercial aerospace revenue due to lower Boeing platform rates and destocking poses a challenge, potentially impacting diversification and growth.

Decreased Backlog

A reduced backlog, particularly in commercial aerospace, may limit future revenue visibility and growth, necessitating strategic adjustments to maintain momentum.

Facility Consolidation Challenges

Operational challenges in facility consolidation and sales mix could hinder efficiency and profitability, requiring management focus to resolve and optimize operations.

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 through the sale of its engineered components and systems to major clients in the aerospace and defense industries. The company’s revenue model includes long-term contracts and project-based work, where it provides both manufacturing and engineering services. Key revenue streams come from the production of airframe assemblies, electrical interconnect systems, and other specialized products tailored to customer specifications. Additionally, partnerships with leading aerospace manufacturers and defense contractors enhance Ducommun's market presence and stability. The company benefits from a diverse customer base that includes both commercial and government sectors, allowing it to capitalize on various defense contracts and aerospace programs.

Ducommun Financial Statement Overview

Summary

Ducommun demonstrates strong financial performance with consistent revenue growth, improved profitability, and effective cost management. The balance sheet reflects a stable equity base with manageable leverage, while cash flow metrics highlight robust cash generation and efficient capital management. Potential risks include maintaining leverage levels and sustaining growth momentum.

Income Statement

Ducommun's TTM (Trailing-Twelve-Months) shows a healthy Gross Profit Margin of 25.57%, indicating effective cost management. The company's Net Profit Margin improved to 4.45%, demonstrating enhanced profitability. Revenue growth is evident with a 4.60% increase from 2022 to 2023 and a continued upward trajectory into 2024. EBIT and EBITDA margins improved, reflecting operational efficiency.

Balance Sheet

The Debt-to-Equity ratio stands at 0.39, indicating a moderate leverage level. Return on Equity improved to 5.07%, highlighting better utilization of equity. The Equity Ratio of 61.38% suggests a strong equity base, providing financial stability. However, the company's leverage remains a potential risk factor.

Cash Flow

Ducommun's Free Cash Flow Growth Rate is robust, showing a 12.85% increase in the TTM, reflecting strong cash generation. The Operating Cash Flow to Net Income ratio of 1.04 signifies effective conversion of profits into cash. The Free Cash Flow to Net Income ratio stands at 0.64, indicating efficient cash retention post capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	795.08M	786.55M	756.99M	712.54M	645.41M	628.94M
Gross Profit	204.42M	197.26M	163.19M	144.30M	142.46M	137.74M
EBITDA	86.33M	85.65M	69.72M	83.58M	213.41M	76.78M
Net Income	39.99M	31.50M	15.93M	28.79M	135.54M	29.17M
Balance Sheet
Total Assets	1.14B	1.13B	1.12B	1.02B	978.74M	837.35M
Cash, Cash Equivalents and Short-Term Investments	37.12M	37.14M	42.86M	46.25M	76.32M	56.47M
Total Debt	256.30M	272.14M	295.59M	282.84M	320.59M	336.61M
Total Liabilities	433.00M	443.57M	484.82M	495.55M	504.13M	508.01M
Stockholders Equity	707.83M	682.53M	636.09M	525.96M	474.60M	329.33M
Cash Flow
Free Cash Flow	40.63M	20.05M	11.54M	12.99M	-17.43M	101.00K
Operating Cash Flow	55.55M	34.18M	31.07M	32.68M	-565.00K	12.61M
Investing Cash Flow	-12.62M	-13.91M	-133.50M	-19.24M	57.75M	-5.47M
Financing Cash Flow	-35.22M	-26.00M	99.05M	-43.51M	-37.34M	9.74M

Ducommun Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 93.41
• 50DMA: Negative
• 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 93.41 is above the 20-day moving average (MA) of 92.24, above the 50-day MA of 91.21, and above the 200-day MA of 72.25, indicating a neutral trend. The MACD of 0.81 indicates Positive momentum. The RSI at 45.41 is Neutral, neither overbought nor oversold. The STOCH value of 40.36 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
DCO	73 Outperform	$1.35B	34.70	5.86%	―	2.42%	72.72%
TATT	70 Outperform	515.75M	32.63	9.97%	―	25.96%	68.93%
ATRO	62 Neutral	1.58B	-283.51	-1.37%	―	10.99%	69.85%
NPK	62 Neutral	805.25M	19.05	11.28%	0.89%	31.27%	26.36%
SWBI	55 Neutral	430.12M	34.89	3.33%	5.36%	-7.25%	-63.58%
EVTL	25 Underperform	535.99M	-0.48	―	―	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Ducommun Corporate Events

Ducommun Strengthens Board Amid Leadership Changes

Ducommun Incorporated has appointed Daniel G. Korte and Daniel L. Boehle to its Board of Directors, bringing expertise in aerospace and defense to support its VISION 2027 Strategy. As part of a broader board refreshment, these appointments aim to enhance Ducommun’s operational and financial capabilities, contributing to its ongoing growth and shareholder value. The company also expressed gratitude to retiring directors Robert C. Ducommun and Dean M. Flatt for their pivotal roles in the company’s transformation.