DLH Holdings (DLHC) AI Stock Analysis

• Market Cap: $81.28M
• Dividend Yield: N/A
• Average Volume (3M): 79.73K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.15
• Revenue Growth: -6.34%
• EPS Growth: 75.05%
• Country: US
• Employees: 2,400
• Sector: Industrials
• Sector Strength: 93
• Industry: Specialty Business Services
• EPS (TTM): 0.06
• Shares Outstanding: 14,386,468
• 10 Day Avg. Volume: 21,708
• 30 Day Avg. Volume: 79,726
• PEG Ratio: 0.05
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 424.32
• Enterprise Value/Market Cap: 2.42
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 2.79
• Enterprise Value/Ebitda: 1.21
• 1Y Price Target: $10.00
• Price Target Upside: 81.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 67 Neutral
• Price Target: $6.00 ▲(9.09%Upside)

DLH Holdings' overall score reflects a stable operational base with positive technical indicators and fair valuation. However, financial challenges and mixed earnings call sentiment, particularly revenue decline and high leverage, temper the outlook. Future growth potential exists but hinges on overcoming current hurdles.

DLH Holdings Business Overview & Revenue Model

Company Description

DLH Holdings Corp. provides technology-enabled business process outsourcing, program management solutions, and public health research and analytics services in the United States. The company offers defense and veterans' health solutions, including healthcare, technology, and logistics solutions to the VA, Defense Health Agency, Tele-medicine and Advanced Technology Research Center, Navy Bureau of Medicine and Surgery, and the Army Medical Research and Material Command. It also provides a range of human services and solutions, which consists of monitoring and evaluation, electronic medical records migration, data collection and management, and nutritional and social health assessments; and IT system architecture design, migration plan, and ongoing maintenance services. In addition, the company offers public health and life sciences services, such as clinical trials, epidemiology studies, and disease prevention; and health promotion to underserved and at-risk communities through development of strategic communication campaigns, research on emerging trends, health informatics analyses, and application of best practices. It primarily serves the federal health services market. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was incorporated in 1969 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

DLH Holdings makes money through government contracts, providing a range of services including healthcare delivery solutions, public health research, and logistics and technical services. The company's revenue model is primarily based on long-term contracts with federal agencies such as the Department of Defense, Department of Health and Human Services, and other civilian agencies. These contracts often involve fixed-price, cost-plus, or time-and-materials agreements, where DLH is paid based on the scope of work and performance metrics. Significant partnerships with other technology and service providers enhance their offerings and contribute to sustained earnings.

DLH Holdings Financial Statement Overview

Summary

DLH Holdings shows stable operational footing with decent gross margins and effective cash flow management. However, challenges like declining revenue and high leverage might affect financial stability. The balance sheet reflects considerable reliance on debt, potentially impacting future growth prospects. Strengths in operational efficiency and cash flow are offset by the need to address leverage and improve profitability.

Income Statement

DLH Holdings has shown a mixed performance in its income statement. The gross profit margin for TTM is approximately 18.7%, and the net profit margin is around 1.44%, indicating that while gross margins are reasonable, net margins are relatively low. The TTM revenue has decreased compared to the previous annual figure, indicating a negative revenue growth rate. However, the EBIT and EBITDA margins are stable, standing at 6.07% and 10.18% respectively, which shows operational efficiency but also room for improvement in profitability.

Balance Sheet

DLH Holdings faces challenges in its balance sheet. The debt-to-equity ratio is roughly 1.44, suggesting a high leverage, which could pose financial risks. The return on equity (ROE) for TTM is about 4.81%, which is modest. The equity ratio stands at approximately 36.80%, indicating that a significant portion of assets is financed through equity, but the company still relies considerably on debt.

Cash Flow

The cash flow statement shows some positive aspects. The TTM operating cash flow to net income ratio is robust at about 3.69, indicating strong cash generation relative to net income. The free cash flow to net income ratio is an impressive 3.52, showcasing effective cash management. However, the free cash flow growth rate is negative compared to the previous year, pointing to potential volatility in cash flow generation.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	377.07M	395.94M	375.87M	395.17M	246.09M	209.19M
Gross Profit	70.38M	78.91M	79.86M	72.29M	51.48M	45.59M
EBITDA	38.40M	40.15M	32.65M	40.94M	25.34M	21.39M
Net Income	5.43M	7.40M	1.46M	23.29M	10.14M	7.11M
Balance Sheet
Total Assets	306.61M	314.38M	339.84M	169.01M	197.17M	183.56M
Cash, Cash Equivalents and Short-Term Investments	196.00K	342.00K	215.00K	228.00K	24.05M	1.36M
Total Debt	162.69M	164.81M	191.71M	39.11M	66.27M	90.94M
Total Liabilities	143.84M	204.25M	237.40M	76.95M	131.56M	130.13M
Stockholders Equity	112.85M	110.13M	102.44M	92.06M	65.61M	53.44M
Cash Flow
Free Cash Flow	19.11M	26.53M	30.41M	371.00K	45.56M	19.30M
Operating Cash Flow	20.03M	27.37M	31.03M	1.24M	45.66M	19.45M
Investing Cash Flow	-371.00K	-836.00K	-181.20M	-872.00K	-44.00K	-32.83M
Financing Cash Flow	-19.70M	-26.40M	150.15M	-24.19M	-22.93M	12.95M

DLH Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLHC, the sentiment is Negative. The current price of 5.5 is below the 20-day moving average (MA) of 5.63, above the 50-day MA of 5.20, and below the 200-day MA of 6.39, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 49.86 is Neutral, neither overbought nor oversold. The STOCH value of 13.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLHC.

DLH Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLHC	67 Neutral	$81.28M	14.69	4.94%	―	-6.34%	75.05%
Sector *	65 Neutral	$10.90B	15.41	5.26%	1.89%	3.11%	-26.85%
ACTG	56 Neutral	$362.57M	7.73	-2.09%	―	65.22%	-133.47%
QUAD	56 Neutral	$282.42M	―	-19.25%	5.39%	-7.00%	71.30%
OMEX	54 Neutral	$40.11M	―		―	-2.44%	―
KODK	54 Neutral	$602.61M	13.76	6.47%	―	-4.32%	-22.48%
TISI	43 Neutral	$80.75M	―	-9999.00%	―	-1.00%	26.86%

DLH Holdings Corporate Events

DLH Holdings Approves New 2025 Equity Incentive Plan

On March 13, 2025, DLH Holdings Corp. shareholders approved the 2025 Equity Incentive Plan at the Annual Meeting, replacing the 2016 Omnibus Equity Incentive Plan. This new plan, effective immediately, signifies a strategic shift in the company’s approach to equity incentives, potentially impacting its market positioning and stakeholder interests.