DLH Holdings (DLHC) AI Stock Analysis

• Market Cap: $89.34M
• Dividend Yield: N/A
• Average Volume (3M): 103.44K
• Price to Earnings (P/E): 19.6
• Beta (1Y): 1.23
• Revenue Growth: -10.30%
• EPS Growth: 86.44%
• Country: US
• Employees: 2,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.02
• Shares Outstanding: 14,386,468
• 10 Day Avg. Volume: 33,229
• 30 Day Avg. Volume: 103,445
• PEG Ratio: 0.05
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 5.00
• Enterprise Value/Market Cap: 2.69
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 3.57
• Enterprise Value/Ebitda: 6.52
• 1Y Price Target: $10.00
• Price Target Upside: 61.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $6.50 ▲(4.84% Upside)

DLH Holdings' overall score is driven by strong cash flow management and positive technical indicators. However, challenges in revenue growth and profitability, along with high leverage, weigh on the score. The earnings call provides cautious optimism for future recovery, but current valuation limits upside potential.

Positive Factors

Strong Cash Flow Management

Strong cash flow management enhances DLH's ability to invest in growth opportunities and manage debt, supporting long-term financial stability.

Alignment with Federal Initiatives

Alignment with federal initiatives positions DLH to capitalize on government spending in emerging technologies, driving future growth.

Effective Debt Reduction

Effective debt reduction improves financial flexibility and reduces interest burden, strengthening DLH's balance sheet over the long term.

Negative Factors

Revenue Decline

A decline in revenue due to changes in contract awards and government efficiency initiatives could challenge DLH's growth and profitability.

Slow Pipeline Conversion

Slow pipeline conversion hampers new business growth, potentially impacting DLH's ability to secure future contracts and expand its client base.

Impact of Government Workforce Cuts

Government workforce cuts delay contract processes, affecting DLH's pipeline and growth prospects, posing a risk to long-term revenue stability.

DLH Holdings Business Overview & Revenue Model

Company Description

DLH Holdings Corporation (DLHC) is a provider of healthcare and other professional services primarily to government agencies, including the Department of Defense and other federal entities. Operating within the sectors of healthcare, logistics, and information technology, DLH specializes in delivering solutions that enhance healthcare delivery, improve operational efficiency, and support the mission-critical needs of its clients. The company offers services such as program management, IT solutions, and healthcare services which cater to a diverse range of government and military clients.

How the Company Makes Money

DLH Holdings generates revenue primarily through government contracts and service agreements. The company secures contracts with federal agencies, particularly in defense and healthcare sectors, which are awarded based on competitive bidding processes. Key revenue streams include healthcare staffing, logistics support, IT services, and program management. Additionally, DLH benefits from strategic partnerships and alliances with other companies and organizations to enhance its service offerings and expand its market reach. The stability and growth of its earnings are closely tied to the federal budget allocations for defense and healthcare services.

DLH Holdings Financial Statement Overview

Summary

DLH Holdings shows a mixed financial performance with challenges in revenue growth and profitability, but strong cash flow generation. The high leverage poses a risk, but the company demonstrates effective cash management. Continued focus on improving profit margins and reducing debt could enhance financial stability.

Income Statement

DLH Holdings has experienced a decline in revenue growth with a TTM revenue decrease of 4.6%. The gross profit margin is relatively stable at 18.7%, but the net profit margin has decreased to 1.3%, indicating pressure on profitability. EBIT and EBITDA margins are moderate, suggesting operational efficiency but with room for improvement.

Balance Sheet

The company has a high debt-to-equity ratio of 1.37, indicating significant leverage, which could pose financial risk. Return on equity is low at 4.1%, reflecting limited profitability from shareholders' equity. The equity ratio is not explicitly calculated but suggests a moderate level of equity relative to assets.

Cash Flow

Free cash flow growth is strong at 29.6%, indicating improved cash generation. The operating cash flow to net income ratio of 0.54 suggests a moderate conversion of income to cash. The free cash flow to net income ratio is high at 0.99, indicating efficient cash flow management relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	359.72M	395.94M	375.87M	395.17M	246.09M	209.19M
Gross Profit	67.22M	78.91M	79.86M	72.29M	51.48M	45.59M
EBITDA	36.81M	40.15M	30.54M	40.30M	24.55M	19.86M
Net Income	4.58M	7.40M	1.46M	23.29M	10.14M	7.11M
Balance Sheet
Total Assets	299.34M	314.38M	339.84M	169.01M	197.17M	183.56M
Cash, Cash Equivalents and Short-Term Investments	194.00K	342.00K	215.00K	228.00K	24.05M	1.36M
Total Debt	155.89M	164.81M	191.71M	39.11M	66.27M	92.98M
Total Liabilities	185.64M	204.25M	237.40M	76.95M	131.56M	130.13M
Stockholders Equity	113.70M	110.13M	102.44M	92.06M	65.61M	53.44M
Cash Flow
Free Cash Flow	24.76M	26.53M	30.41M	371.00K	45.56M	19.30M
Operating Cash Flow	24.97M	27.37M	31.03M	1.24M	45.66M	19.45M
Investing Cash Flow	-422.00K	-836.00K	-181.20M	-872.00K	-44.00K	-32.83M
Financing Cash Flow	-24.78M	-26.40M	150.15M	-24.19M	-22.93M	12.95M

DLH Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLHC, the sentiment is Positive. The current price of 6.2 is above the 20-day moving average (MA) of 6.04, above the 50-day MA of 5.79, and above the 200-day MA of 5.22, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 56.71 is Neutral, neither overbought nor oversold. The STOCH value of 56.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DLHC.

DLH Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLHC	66 Neutral	$89.34M	19.60	4.12%	―	-10.30%	86.44%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PMEC	42 Neutral	$49.56M	-24.90	-13.00%	―	2.52%	45.76%
SGRP	41 Neutral	$26.40M	-2.02	-93.99%	―	-35.72%	-277.39%
SST	40 Underperform	$56.41M	-0.59	-99.29%	―	-20.49%	25.95%
OMEX	39 Underperform	$80.89M	-3.50	―	―	-41.55%	-249.30%
TISI	38 Underperform	$73.87M	-1.40	-210.92%	―	3.73%	3.56%

DLH Holdings Corporate Events

DLH Holdings Secures $90M Contract with Veteran Affairs

DLH Holdings announced that its contract with the Office of Head Start, which accounted for 10.7% of its fiscal year revenue, will end on October 31, 2025, as the renewal was awarded to small businesses. The company plans to mitigate this impact by pursuing new business opportunities. Additionally, DLH has secured a sole-source IDIQ contract with the Department of Veteran Affairs for pharmacy and logistics services, valued at $90 million, effective October 28, 2025, with a performance period through April 2027.

The most recent analyst rating on (DLHC) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on DLH Holdings stock, see the DLHC Stock Forecast page.

DLH Holdings Corp. Earnings Call: Balancing Growth and Challenges

During the latest earnings call, DLH Holdings Corp. conveyed a mixed sentiment. The company is taking proactive steps in debt reduction and cash flow generation, aligning well with federal spending priorities, which are positive indicators. However, these positive aspects are tempered by challenges such as a significant revenue decline and slowed pipeline conversion due to administrative and market dynamics.

DLH Holdings Reports Q3 Earnings and Debt Reduction

DLH Holdings Corp., a prominent provider of science research, systems engineering, and cybersecurity solutions to federal agencies, has released its fiscal 2025 third-quarter earnings report. The company, known for its digital transformation initiatives, reported a decrease in revenue and earnings compared to the previous year, attributed to program timing and small business conversions. Despite these challenges, DLH successfully reduced its debt by $9.4 million during the quarter, showcasing strong cash flow management. Key financial metrics indicate a revenue of $83.3 million, a net income of $0.3 million, and an EBITDA of $8.1 million for the quarter. The company’s contract backlog stands at $555.3 million, reflecting a strategic focus on future growth. Looking ahead, DLH’s management remains optimistic about fiscal 2026, anticipating increased bid activity and funding in key areas such as cybersecurity and public health, positioning the company for medium to long-term growth.