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DLH Holdings
(NASDAQ:DLHC)
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Rating:47Neutral
Price Target:
$5.50
▲(8.06% Upside)
Action:Reiterated
Date:07/30/26
DLHC scores low-to-mid primarily due to weakening financial performance (TTM revenue decline and return to losses) and a leveraged balance sheet, partly offset by still-positive free cash flow. Technicals remain weak versus longer-term moving averages, while valuation is challenged by a negative P/E. The earnings call and recent financing/leadership events add some support via margin resilience, deleveraging efforts, and improved covenant flexibility, but near-term contract transition headwinds remain the central risk.
Positive Factors
Navy cyberspace IDIQ expands federal technical-services opportunity
The Navy vehicle broadens DLH’s addressable federal work beyond healthcare and creates access to future task orders in cybersecurity, engineering and technology integration. While awards are not guaranteed, it strengthens positioning in mission-critical services with durable government demand.
Negative Factors
Contract transitions and completions are materially shrinking revenue
The decline reflects loss or transfer of substantial work rather than a minor fluctuation, weakening operating leverage and earnings quality. Replacing the volume requires successful new awards and timely starts, leaving the business exposed during the transition period.
Read all positive and negative factors
Positive Factors
Negative Factors
Navy cyberspace IDIQ expands federal technical-services opportunity
The Navy vehicle broadens DLH’s addressable federal work beyond healthcare and creates access to future task orders in cybersecurity, engineering and technology integration. While awards are not guaranteed, it strengthens positioning in mission-critical services with durable government demand.
Read all positive factors
DLH Holdings (DLHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.51M
Dividend YieldN/A
Average Volume (3M)27.65K
Price to Earnings (P/E)―
Beta (1Y)1.13
Revenue Growth-29.52%
EPS Growth-564.69%
CountryUS
Employees2,300
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)-1.51
Shares Outstanding14,493,035
10 Day Avg. Volume37,306
30 Day Avg. Volume27,646
Financial Highlights & Ratios
PEG Ratio-0.73
Price to Book (P/B)0.72
Price to Sales (P/S)0.24
P/FCF Ratio3.54
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$7.00Price Target Upside37.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-1.7
Revenue Forecast (FY)$209.38M
DLH Holdings Business Overview & Revenue Model
Company Description
DLH Holdings Corp., headquartered in Atlanta, Georgia, was established in 1969 and operated as TeamStaff, Inc. until its name change in June 2012. The company specializes in offering a range of technology-enabled business process outsourcing, comp...
How the Company Makes Money
DLH primarily makes money by performing services under contracts and task orders for U.S. federal government agencies and recognizing revenue as it satisfies performance obligations on those contracts. Key revenue streams come from providing healt...
DLH Holdings Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Dec 07, 2026
Earnings Call Sentiment Neutral
The call communicated a mixed picture: material near-term financial headwinds with a steep year-over-year revenue decline (~33.5%) and a sharp drop in adjusted EBITDA (~43.6%), largely driven by program transitions to small business set-asides and contract completions. Offsetting these negatives, management reported margin resilience (9% adjusted EBITDA margin), positive free cash flow (~$3.8M), resumed deleveraging (debt reduced to $132.7M), a two-year NIH contract extension adding revenue visibility, recognition for technology capabilities, and an improving pipeline as delayed procurements return to market. Risks remain around federal health reprioritization and typical government procurement timing uncertainty, but the company appears to be stabilizing its cost structure and positioning for upcoming opportunities.Positive Updates
Adjusted EBITDA Margin Maintained
Delivered adjusted EBITDA of $5.3 million and an adjusted EBITDA margin of 9% for the quarter, demonstrating margin resilience despite lower revenue.
Negative Updates
Significant Revenue Decline
Reported revenue of $59.3 million for the quarter versus $89.2 million in the prior-year period, a year-over-year decline of approximately 33.5%, primarily driven by program transitions to small business set-aside contracts and contract completions.
Read all updates
Q2-2026 Updates
Positive
Negative
Adjusted EBITDA Margin Maintained
Delivered adjusted EBITDA of $5.3 million and an adjusted EBITDA margin of 9% for the quarter, demonstrating margin resilience despite lower revenue.
Read all positive updates
Company Guidance
The company guided that fiscal 2026 Q2 results reflected revenue of $59.3 million (vs. $89.2M year-ago), adjusted EBITDA of $5.3 million (vs. $9.4M), and an adjusted EBITDA margin of 9%, with roughly $3.8 million of free cash flow generated in the quarter; total debt was reduced to $132.7 million from $136.6 million the prior quarter (a $3.9M decline), and management expects to convert approximately 50%–55% of fiscal‑2026 EBITDA to debt reduction by year‑end while remaining in compliance with covenants; operationally they expect to complete the VA CMOP transition just before Memorial Day, received a two‑year sole‑source NIH extension, see a healthy pipeline with awards expected in the coming months (and some decisions by fiscal year‑end), and noted that FY2026 funding rose vs FY2025 for key federal health agencies while the President’s FY2027 request calls for historic defense/intel increases and unspecified federal health reductions.DLH Holdings Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
45
Neutral
Cash Flow
60
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 253.54M | 344.50M | 395.94M | 375.87M | 395.17M | 246.09M |
| Gross Profit | 41.22M | 65.16M | 77.49M | 79.86M | 72.29M | 51.48M |
| EBITDA | 14.96M | 32.29M | 40.15M | 30.54M | 40.30M | 24.55M |
| Net Income | -21.57M | 1.36M | 7.40M | 1.46M | 23.29M | 10.14M |
Balance Sheet | ||||||
| Total Assets | 254.81M | 290.66M | 314.38M | 339.84M | 169.01M | 197.17M |
| Cash, Cash Equivalents and Short-Term Investments | 235.00K | 125.00K | 342.00K | 215.00K | 228.00K | 24.05M |
| Total Debt | 141.14M | 144.97M | 164.81M | 191.71M | 39.11M | 66.27M |
| Total Liabilities | 161.54M | 177.71M | 204.25M | 237.40M | 76.95M | 131.56M |
| Stockholders Equity | 93.26M | 112.96M | 110.13M | 102.44M | 92.06M | 65.61M |
Cash Flow | ||||||
| Free Cash Flow | 13.83M | 22.98M | 26.53M | 30.41M | 371.00K | 45.56M |
| Operating Cash Flow | 13.90M | 23.22M | 27.37M | 31.03M | 1.24M | 45.66M |
| Investing Cash Flow | -67.00K | -241.00K | -836.00K | -181.20M | -872.00K | -44.00K |
| Financing Cash Flow | -13.79M | -23.19M | -26.40M | 150.15M | -24.19M | -22.93M |
DLH Holdings Technical Analysis
Negative
5.09
Price Trends
5.17
Negative
5.46
Negative
5.65
Negative
Market Momentum
-0.19
Positive
34.32
Neutral
14.15
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 5.09 is above the 20-day moving average (MA) of 4.87, below the 50-day MA of 5.17, and below the 200-day MA of 5.65, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 34.32 is Neutral, neither overbought nor oversold. The STOCH value of 14.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLHC.
DLH Holdings Risk Analysis
DLH Holdings disclosed 44 risk factors in its most recent earnings report. DLH Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
DLH Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
49 Neutral | $19.03M | -0.27 | -243.26% | ― | -8.81% | -92.12% | |
47 Neutral | $65.51M | -3.03 | -20.12% | ― | -29.52% | -564.69% | |
47 Neutral | $106.88M | -2.38 | -468.47% | ― | 2.62% | 19.50% | |
47 Neutral | $19.87M | -7.79 | -10.56% | ― | 4.92% | -22.39% | |
44 Neutral | $49.54M | -1.02 | 100.12% | ― | -70.31% | -348.06% | |
44 Neutral | $21.40M | -0.18 | -333.08% | ― | -42.93% | -17.25% |
* Industrials Sector Average
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DLH Holdings Corporate Events
Business Operations and StrategyExecutive/Board Changes
DLH Holdings Announces Executive Leadership Transition and Compensation
Positive
Jul 6, 2026
On June 29, 2026, DLH announced that President and Chief Executive Officer Zachary C. Parker would resign effective June 30, 2026, while remaining on the board as a non-employee director with advisory and consulting roles extending through at leas...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
DLH Holdings Amends Secured Credit Agreement to Increase Flexibility
Positive
Jun 17, 2026
On June 11, 2026, DLH Holdings Corp. and its subsidiaries executed a second amendment to their existing secured credit agreement, which provides a syndicated term loan and revolving credit facility. The amendment preserves the overall structure of...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.