Dorman Products (DORM) AI Stock Analysis

• Market Cap: $3.60B
• Dividend Yield: N/A
• Average Volume (3M): 188.74K
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.77
• Revenue Growth: 7.94%
• EPS Growth: 34.84%
• Country: US
• Employees: 3,787
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 2.17
• Shares Outstanding: 30,562,643
• 10 Day Avg. Volume: 227,129
• 30 Day Avg. Volume: 188,735
• PEG Ratio: 2.44
• Price to Book (P/B): 2.57
• Price to Sales (P/S): 1.78
• P/FCF Ratio: 50.07
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 1.96
• Enterprise Value/Gross Profit: 4.69
• Enterprise Value/Ebitda: 11.64
• 1Y Price Target: $158.00
• Price Target Upside: 34.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 9.44
• Revenue Forecast (FY): $2.28B

• Rating: 65 Neutral
• Price Target: $127.00 ▲(7.75% Upside)
• Action: Downgraded Date: 02/28/26
• Date: Action: Downgraded 02/28/26

The score is driven primarily by solid profitability and an improving leverage profile, offset by notably weaker and more volatile cash generation. Technicals further weigh on the score as the stock is in a clear downtrend with negative momentum. Valuation appears reasonable at ~17.75x earnings, and the earnings call was supportive on 2026 growth/margin recovery, but near-term tariff and segment-specific pressures remain key risks.

Positive Factors

Revenue & Margin Trend

Sustained top-line acceleration and materially higher gross and EBIT margins indicate durable demand capture and pricing or product-mix advantages. Over a multi-quarter horizon this supports reinvestment in new SKUs, margin resiliency versus peers, and stronger operating cash generation if working-capital volatility eases.

Product Innovation Pipeline

A steady stream of new, complex SKUs—particularly in electronics—builds proprietary addressable market and aftermarket stickiness. This asset-light innovation model widens distribution appeal, supports higher ASPs and cross-sell, and creates sustainable differentiation that can drive multi-year revenue and margin expansion.

Improving Leverage & Liquidity

Marked improvement in leverage and meaningful liquidity provide financial flexibility for capital allocation, M&A or supply-chain investments. Lower net leverage reinforces credit stability and supports continued buybacks or strategic spending while management works to stabilize cash conversion.

Negative Factors

Cash-Flow Volatility

Sharp year-over-year cash-flow deterioration signals working-capital sensitivity and timing risk; inconsistent conversion of EBITDA to cash reduces capacity to fund capex, buybacks or debt paydown reliably. Persistent volatility undermines confidence in sustaining investment and returns absent structural fixes.

Tariff-Related Inventory Drag

Tariff-driven higher-cost inventory and FIFO timing create multi-quarter margin and cash headwinds as cost recognition lags purchases. Such structural sourcing cost risk pressures gross margin and operational cash flow until supplier diversification and repricing fully offset the exposure.

Heavy-Duty End-Market Weakness

The goodwill write-down reflects durable weakening or lower recoverability in heavy-duty demand. Continued cyclicality in trucking undermines segment visibility and can depress returns and free cash flow for an extended period, creating downside risk if recovery is protracted.

Dorman Products Business Overview & Revenue Model

Company Description

Dorman Products, Inc. supplies replacement parts and fasteners for passenger cars, light trucks, and medium- and heavy-duty trucks in the automotive aftermarket industry worldwide. It offers original equipment dealer products, such as intake and exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and oil drain plugs, and wheel bolts and lug nuts. The company also provides automotive replacement parts, including door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles, such as lighting, cooling, engine management, wheel hardware, air tanks, and cab products. It offers powertrain products comprising cooling products, harmonic balancers, fluid lines and reservoirs, connectors, 4-wheel drive components, other engine, and transmission and axle components; and chassis products, such as control arms, ball joints, tie-rod ends, brake hardware and hydraulics, axle hardware, suspension arms, knuckles, links, bushings, leaf springs, other suspension, steering, and brake components. The company also provides automotive body products, including window lift motors, switches and handles, wiper, and other interior and exterior automotive body components; and hardware products comprising threaded bolts; automotive and home electrical wiring components; and other hardware assortments and merchandise. It offers its products under the OE Solutions, HELP!, OE FIX, Conduct-Tite, and HD Solutions brands through automotive aftermarket retailers, such as on-line platforms; national, regional, and local warehouse distributors; and specialty markets; salvage yards; local independent parts wholesalers; and mass merchants. The company was founded in 1918 and is headquartered in Colmar, Pennsylvania.

How the Company Makes Money

Dorman Products generates revenue primarily through the sale of automotive replacement parts and accessories to both professional installers and consumers. The company operates a multi-channel distribution model, selling products through traditional automotive retailers, e-commerce platforms, and directly to repair shops. Key revenue streams include sales of new product lines developed through extensive research and development efforts, as well as revenue from expanding their product offerings in niche markets. Dorman also benefits from strategic partnerships with major automotive retailers and distributors, which enhance its market reach and visibility. Additionally, the company's focus on innovation, including the introduction of exclusive product solutions and enhancements, allows it to maintain competitive pricing while maximizing profit margins.

Dorman Products Financial Statement Overview

Summary

Strong income statement performance (revenue growth accelerating and solid margins), supported by a generally healthy balance sheet with improving leverage. The main drag is cash-flow quality: 2025 operating cash flow and free cash flow fell sharply with weaker cash conversion versus net income, lowering confidence in consistency.

Income Statement

Revenue growth has been consistently positive across the period, accelerating to ~19.6% in 2025, supporting a solid top-line trajectory. Profitability has strengthened versus earlier years, with 2025 gross margin ~41% and EBIT margin ~14.3% (both well above 2022–2023 levels). Net margin is steady around ~9.6% in 2025, indicating healthy earnings power, though not rapidly expanding. A modest watch-out is that EBITDA margin dipped from ~17.6% (2024) to ~16.9% (2025), suggesting some cost pressure even as revenue grew.

Balance Sheet

Leverage looks manageable and improving versus the 2022 peak: debt-to-equity declined to ~0.43 in 2025 from ~0.81 in 2022, while equity has grown meaningfully (2025 equity ~$1.48B vs. ~$1.04B in 2022). Returns remain solid, with return on equity ~13.8% in 2025 (and ~14–15% in 2024), supporting a quality capital profile. The main weakness is that total debt has risen in absolute dollars versus 2024 (to ~$633M in 2025), so continued earnings and cash generation need to keep pace to preserve balance-sheet flexibility.

Cash Flow

Cash generation is the key weak spot: operating cash flow fell sharply to ~$114M in 2025 from ~$231M in 2024, and free cash flow declined to ~$76M (down ~28% year over year). Cash conversion also weakened, with operating cash flow covering only ~23% of net income in 2025 (down from ~41% in 2024), which points to working-capital or timing-related headwinds. Positively, free cash flow still covered a meaningful portion of net income (~67%) in 2025, but the year-to-year volatility (including the very weak 2022 cash flow) lowers confidence in consistency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.13B	2.01B	1.93B	1.73B	1.35B
Gross Profit	876.16M	806.36M	685.42M	564.45M	462.92M
EBITDA	359.75M	352.68M	271.29M	216.46M	207.12M
Net Income	204.19M	190.00M	129.26M	121.55M	131.53M
Balance Sheet
Total Assets	2.49B	2.42B	2.29B	2.34B	1.67B
Cash, Cash Equivalents and Short-Term Investments	49.44M	57.14M	36.81M	46.03M	58.78M
Total Debt	633.05M	572.78M	683.80M	848.46M	301.87M
Total Liabilities	1.02B	1.13B	1.12B	1.30B	740.38M
Stockholders Equity	1.48B	1.29B	1.17B	1.04B	932.74M
Cash Flow
Free Cash Flow	75.67M	191.63M	164.79M	3.81M	80.50M
Operating Cash Flow	113.63M	231.05M	208.76M	41.69M	100.34M
Investing Cash Flow	-37.97M	-39.32M	-43.90M	-526.84M	-365.32M
Financing Cash Flow	-83.69M	-170.98M	-174.11M	472.50M	168.24M

Dorman Products Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 117.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DORM, the sentiment is Negative. The current price of 117.86 is below the 20-day moving average (MA) of 126.90, below the 50-day MA of 126.17, and below the 200-day MA of 134.60, indicating a bearish trend. The MACD of -1.89 indicates Positive momentum. The RSI at 35.70 is Neutral, neither overbought nor oversold. The STOCH value of 21.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DORM.

Dorman Products Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GNTX	78 Outperform	$5.04B	13.45	15.30%	2.05%	2.99%	-9.80%
LEA	72 Outperform	$6.66B	16.10	9.21%	2.63%	-1.90%	-13.86%
VC	72 Outperform	$2.57B	13.14	14.37%	0.57%	-4.03%	-39.51%
LKQ	68 Neutral	$8.45B	14.06	9.78%	4.00%	-3.71%	-0.27%
DORM	65 Neutral	$3.60B	17.75	14.74%	―	7.94%	34.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	59 Neutral	$4.00B	53.85	-4.82%	1.70%	-18.23%	―

Dorman Products Corporate Events

Dorman Products announces broad senior leadership team changes

On January 19, 2026, Dorman Products announced a suite of senior leadership changes intended to accelerate its growth strategy and sharpen execution across its light-duty and heavy-duty vehicle aftermarket segments. Charles W. Rayfield joined the company that day as Senior Vice President, Chief Financial Officer Designate and Treasurer, succeeding retiring CFO David M. Hession once Dorman files its 2025 annual report, while Nathan J. Porter became Senior Vice President, Chief Operations Officer overseeing distribution, manufacturing, logistics, and sourcing. The company also promoted Eric B. Luftig, who has led product, engineering, quality, and manufacturing for the Light Duty business since 2021, to President, Light Duty, and appointed Steven A. Bashir as President, Heavy Duty, as part of a planned transition following John R. McKnight’s retirement, moves that collectively signal a deliberate refresh of Dorman’s leadership bench to support innovation, operational excellence, and long-term growth in the competitive aftermarket parts industry.

The most recent analyst rating on (DORM) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on Dorman Products stock, see the DORM Stock Forecast page.