Distribution Solutions Group (DSGR) AI Stock Analysis

• Market Cap: $1.20B
• Dividend Yield: N/A
• Average Volume (3M): 72.01K
• Price to Earnings (P/E): 152.2
• Beta (1Y): 1.30
• Revenue Growth: 14.46%
• EPS Growth: -588.82%
• Country: US
• Employees: 4,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): -0.14
• Shares Outstanding: 46,186,295
• 10 Day Avg. Volume: 70,849
• 30 Day Avg. Volume: 72,014
• PEG Ratio: -0.72
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 29.29
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 0.97
• Enterprise Value/Gross Profit: 3.01
• Enterprise Value/Ebitda: 13.50
• 1Y Price Target: $35.00
• Price Target Upside: 34.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.14
• Revenue Forecast (FY): $2.05B

• Rating: 56 Neutral
• Price Target: $27.00 ▲(3.57% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is driven primarily by improving financial footing (notably lower leverage and positive 2025 cash generation) but constrained by still-thin and inconsistent profitability. Technical signals are weak-to-neutral (below major moving averages, negative MACD), and valuation is a headwind due to the very high P/E. Earnings-call commentary is moderately constructive on mid-2026 margin recovery and liquidity, but near-term margin pressure adds execution risk.

Positive Factors

Balance sheet strength

A material reduction in debt and low debt-to-equity materially improves financial flexibility and reduces refinancing and interest-rate risk. This stronger balance sheet supports M&A, targeted buybacks, and investment in operations without jeopardizing liquidity through business cycles.

Cash generation & liquidity

Sustained positive operating and free cash flow with high conversion rates provides durable internal funding for capex, working capital and deleveraging. Large available liquidity cushions downturns and gives management room for tuck-in acquisitions and strategic investments.

Scale and higher‑margin segment progress

Material scale across diversified segments reduces single-market exposure and enables operating leverage. Gexpro's clear margin expansion shows the company can grow higher‑margin services, supporting long‑term improvement in consolidated profitability if replicated across other units.

Negative Factors

Thin and inconsistent profitability

Persistently low net margins and prior multi-year losses indicate the company has not reliably converted revenue scale into durable profits. Weak returns constrain reinvestment capacity, limit buffer against shocks, and make long‑term ROI dependent on sustained margin improvement.

Margin pressure from one‑time and structural costs

Significant timing and elevated operating cost items compressed margins and reveal sensitivity to workforce, credit and healthcare cost swings. If some of these cost pressures prove structural, margin volatility may persist and slow durable operating‑profit recovery.

Operational and integration risks

M&A integration and local account execution issues create ongoing drag on profitability and create implementation risk for scale benefits. Delays in achieving synergy and compliance costs in new geographies can extend the timeline for margin normalization and cash return on acquisitions.

Distribution Solutions Group Business Overview & Revenue Model

Company Description

Lawson Products, Inc. sells and distributes specialty products to the industrial, commercial, institutional, and government maintenance, repair, and operations market. It sells its products to customers in the United States, Puerto Rico, Canada, Mexico, and the Caribbean. The company was founded in 1952 and is headquartered in Chicago, Illinois.

How the Company Makes Money

DSGR primarily makes money by selling products and value-added distribution services to business customers across its operating segments. (1) Product distribution revenue: The company generates revenue from the resale of MRO supplies, industrial consumables, and other maintenance-related products (Lawson Products); electronic test and measurement equipment and related products (TestEquity); and electrical, automation, and other industrial supplies along with programmatic distribution offerings (Gexpro Services). Revenue is recognized when products are delivered/fulfilled under customer orders, and gross profit is earned on the spread between procurement costs and selling prices. (2) Value-added services and solutions: In addition to product sales, the company earns revenue from services that support customers’ procurement and operations, such as specialized sourcing, inventory management/supply programs, and other solutions offered by its business units; the extent of service-specific revenue detail beyond these general categories is null. (3) Customer/channel model: Revenue is driven by a mix of field/service sales, B2B account relationships, and distribution/e-commerce/order-fulfillment capabilities (segment-specific detail beyond this general model is null). Key factors influencing earnings include sales volume to industrial end markets, pricing and product mix, supplier costs and availability, and operational execution across distribution and fulfillment networks. Specific material partnerships or their quantitative contribution to revenue are null.

Distribution Solutions Group Financial Statement Overview

Summary

Strong multi-year revenue scaling and improved 2025 cash generation (positive operating cash flow and free cash flow) are supportive, and leverage improved sharply with a large debt reduction. However, profitability is still the key constraint: net margins remain very thin and earnings/returns have been inconsistent, which limits the financial quality score.

Income Statement

Revenue has scaled materially over the last several years (from ~$352M in 2020 to ~$2.0B in 2025) with continued growth in 2025 (+5.7% year over year), but the growth rate has moderated meaningfully versus the very strong 2022–2024 ramp. Profitability is the key constraint: net margin remains thin (about 0.4% in 2025) and was negative in 2023–2024, indicating limited earnings resilience. Gross margin has been relatively steady around the mid-30% range in recent years, but operating leverage has not consistently translated into strong bottom-line results.

Balance Sheet

Leverage improved sharply in 2025, with total debt down to ~$155M from ~$831M in 2024 and debt relative to equity moving to a low ~0.24x, which materially strengthens financial flexibility. Equity is sizable (~$649M) against ~$1.75B of assets, supporting balance sheet stability. The main weakness is returns: return on equity is low in 2025 (~1.3%) and was negative in 2023–2024, reflecting that the company has not consistently converted its capital base into attractive profits.

Cash Flow

Cash generation improved versus the loss-making years, with solid positive operating cash flow (~$84M) and free cash flow (~$63M) in 2025. However, free cash flow declined year over year (down ~16.9%), and the business has shown variability (notably negative operating and free cash flow in 2022). Overall, cash flow is currently supportive but not yet consistently durable across cycles.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.98B	1.80B	1.57B	1.15B	520.29M
Gross Profit	615.55M	613.77M	555.46M	390.90M	130.28M
EBITDA	168.57M	128.99M	143.75M	82.42M	30.68M
Net Income	8.35M	-7.33M	-8.97M	7.41M	-5.05M
Balance Sheet
Total Assets	1.75B	1.73B	1.55B	1.22B	491.36M
Cash, Cash Equivalents and Short-Term Investments	61.75M	66.48M	83.93M	24.55M	14.67M
Total Debt	819.11M	831.09M	649.05M	471.93M	248.31M
Total Liabilities	1.10B	1.09B	888.73M	652.62M	325.59M
Stockholders Equity	649.35M	640.54M	661.60M	563.00M	165.77M
Cash Flow
Free Cash Flow	43.35M	33.26M	77.61M	-31.13M	-3.46M
Operating Cash Flow	83.85M	56.45M	102.29M	-11.03M	10.32M
Investing Cash Flow	-29.49M	-229.68M	-278.52M	-126.69M	-41.38M
Financing Cash Flow	-64.27M	159.30M	250.41M	148.46M	34.67M

Distribution Solutions Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 26.07
• 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 DSGR, the sentiment is Neutral. The current price of 26.07 is below the 20-day moving average (MA) of 26.38, below the 50-day MA of 28.34, and below the 200-day MA of 28.86, indicating a bearish trend. The MACD of -1.93 indicates Positive momentum. The RSI at 46.78 is Neutral, neither overbought nor oversold. The STOCH value of 46.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DSGR.

Distribution Solutions Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIC	76 Outperform	$1.18B	15.56	23.59%	3.48%	0.16%	2.99%
DXPE	75 Outperform	$2.04B	19.31	18.67%	―	12.76%	36.11%
AIT	72 Outperform	$9.58B	25.36	21.74%	0.70%	4.03%	5.93%
MSM	66 Neutral	$4.99B	23.96	14.89%	3.96%	-1.35%	-22.24%
WCC	66 Neutral	$12.56B	18.89	13.02%	0.72%	5.28%	1.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DSGR	56 Neutral	$1.20B	152.18	-1.68%	―	14.46%	-588.82%

Distribution Solutions Group Corporate Events

Distribution Solutions Group Expands Credit Facilities for Growth

On December 18, 2025, Distribution Solutions Group, Inc. entered into a Second Amended and Restated Credit Agreement that extends and expands its senior secured credit facilities through December 18, 2030, comprising a $700 million term loan and a $400 million revolving credit facility, with an option to increase total commitments by up to $500 million. The company plans to use the new term loan to repay approximately $709 million outstanding under its prior credit agreement and to fund working capital, general corporate purposes and permitted acquisitions, while the oversubscribed facility, tighter leverage- and interest-coverage covenants, and first-priority security package collectively enhance DSG’s access to capital, strengthen its balance sheet and provide greater financial flexibility to pursue strategic organic and inorganic growth, underscoring lenders’ confidence in its long-term growth plans and shareholder value strategy.

The most recent analyst rating on (DSGR) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Distribution Solutions Group stock, see the DSGR Stock Forecast page.