Distribution Solutions Group (DSGR) AI Stock Analysis

• Market Cap: $1.38B
• Dividend Yield: N/A
• Average Volume (3M): 51.62K
• Price to Earnings (P/E): 1840.4
• Beta (1Y): 0.85
• Revenue Growth: 13.91%
• EPS Growth: N/A
• Country: US
• Employees: 4,400
• Sector: Industrials
• Sector Strength: 94
• Industry: Industrial - Distribution
• EPS (TTM): 0.07
• Shares Outstanding: 46,438,340
• 10 Day Avg. Volume: 42,556
• 30 Day Avg. Volume: 51,624
• PEG Ratio: 9.52
• Price to Book (P/B): 2.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 51.09
• Enterprise Value/Market Cap: 1.53
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 3.38
• Enterprise Value/Ebitda: 4.97
• 1Y Price Target: $39.00
• Price Target Upside: 31.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 65 Neutral
• Price Target: $31.00 ▲(4.62%Upside)

Distribution Solutions Group shows strong financial performance with notable revenue growth and cash flow management. The technical analysis indicates positive momentum, but the high P/E ratio suggests overvaluation concerns. The earnings call provided a balanced outlook with both positive achievements and challenges. The new CEO appointment is a positive strategic move.

Positive Factors

Merger and Acquisition

Distribution Solutions Group was formed through the merger of Lawson Products, Gexpro Services, and TestEquity, creating a strong, diversified company in the industrial distribution space.

Revenue Growth

Q4/24 revenue increased 18.6% YOY to $480.5 million, which exceeded estimates and consensus.

Sales Performance

The Gexpro Services segment continued to be the standout performer with its average daily sales increasing 23% YOY on an organic basis.

Negative Factors

Order Delays

Lawson’s revenue was impacted throughout 2024 by order delays from military customers due to disruption from a new order entry system implemented by the government.

Revenue Forecast

Revenue came in lower than internal forecasts and external estimates, with the downside variance primarily in the Canada Branch and TestEquity segment.

Sales Challenges

The Lawson Products segment experienced a decline in organic average daily sales due to lower military sales and reduced sales representative headcount.

Distribution Solutions Group Business Overview & Revenue Model

Company Description

Distribution Solutions Group (DSGR) is a leading provider of distribution and supply chain solutions across various industries, including industrial, safety, and electrical sectors. The company focuses on delivering a wide range of products and services that enhance operational efficiency and reduce supply chain complexities for its clients. With a robust network and a commitment to innovation, DSGR caters to the needs of businesses seeking reliable distribution and logistics solutions.

How the Company Makes Money

Distribution Solutions Group makes money through the sale of products and services related to distribution and supply chain management. Its revenue model primarily involves sourcing a diverse array of products, including industrial, safety, and electrical supplies, and distributing them to businesses across multiple sectors. The company leverages its extensive logistics network and expertise to offer value-added services, such as inventory management, just-in-time delivery, and customized supply chain solutions. Additionally, DSGR may engage in strategic partnerships with manufacturers and suppliers to enhance its product offerings and market reach, further contributing to its earnings.

Distribution Solutions Group Financial Statement Overview

Summary

Distribution Solutions Group is performing well with substantial revenue growth and improving operational margins. The balance sheet reflects a solid financial structure, although return on equity remains a concern. Cash flow management is a strong point, with significant cash generation relative to reported earnings, positioning the company well for future growth and investment opportunities.

Income Statement

Distribution Solutions Group has shown notable revenue growth, increasing from $1570M in 2023 to $1866M in TTM (Trailing-Twelve-Months), reflecting a strong demand in its industry. The Gross Profit Margin stands at 33.34%, indicating effective cost management. However, the Net Profit Margin is low at 0.06%, suggesting that operational expenses are high relative to revenue. The EBITDA Margin has improved to 5.89%, showing enhanced operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is 0.24, indicating a moderate level of leverage and reliance on debt financing. The Equity Ratio is 36.11%, demonstrating a stable financial structure with a healthy proportion of assets funded by equity. However, the Return on Equity is low at 0.18%, reflecting challenges in generating returns for shareholders.

Cash Flow

DSGR has shown strong Free Cash Flow growth, with a recent Free Cash Flow of $25.6M compared to $42.8M in the previous period, indicating effective cash management. The Operating Cash Flow to Net Income Ratio is favorable at 39.10, representing robust cash earnings relative to reported profits. The Free Cash Flow to Net Income Ratio is also strong at 22.22, showing efficient cash generation capabilities.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.80B	1.57B	1.15B	417.73M	351.59M
Gross Profit	613.77M	551.88M	390.90M	219.24M	186.54M
EBITDA	55.95M	104.36M	82.42M	30.68M	28.14M
Net Income	-7.33M	-8.97M	7.41M	9.41M	15.11M
Balance Sheet
Total Assets	1.73B	1.55B	1.22B	256.16M	256.30M
Cash, Cash Equivalents and Short-Term Investments	66.48M	83.93M	24.55M	4.18M	28.39M
Total Debt	831.09M	649.05M	461.97M	27.21M	10.31M
Total Liabilities	1.09B	888.73M	652.62M	123.15M	133.88M
Stockholders Equity	640.54M	661.60M	563.00M	133.01M	122.42M
Cash Flow
Free Cash Flow	42.77M	77.61M	-31.13M	-2.74M	30.84M
Operating Cash Flow	56.45M	102.29M	-11.03M	5.45M	32.53M
Investing Cash Flow	-229.68M	-278.52M	-126.69M	-41.19M	-3.99M
Financing Cash Flow	159.30M	250.41M	148.46M	10.66M	-5.77M

Distribution Solutions Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSGR, the sentiment is Positive. The current price of 29.63 is above the 20-day moving average (MA) of 28.60, above the 50-day MA of 27.86, and below the 200-day MA of 31.79, indicating a neutral trend. The MACD of 0.41 indicates Negative momentum. The RSI at 61.21 is Neutral, neither overbought nor oversold. The STOCH value of 75.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DSGR.

Distribution Solutions Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DXPE	77 Outperform	$1.66B	22.00	19.45%	―	11.94%	34.08%
GIC	75 Outperform	$1.07B	17.51	22.15%	3.67%	-0.79%	-13.64%
MSM	74 Outperform	$4.85B	24.71	14.34%	3.91%	-4.11%	-31.26%
AIT	73 Outperform	$10.21B	26.78	22.23%	0.62%	0.50%	4.48%
GWW	73 Outperform	$50.19B	26.68	57.19%	0.80%	3.71%	7.23%
Sector *	65 Neutral	$11.06B	15.73	5.16%	1.93%	3.12%	-25.59%
DSGR	65 Neutral	$1.38B	1,840.37	0.18%	―	13.91%	―

Distribution Solutions Group Corporate Events

Distribution Solutions Group Appoints New CEO for TestEquity

On June 26, 2025, Distribution Solutions Group appointed Barry Litwin as the CEO of its subsidiary, TestEquity, effective July 14, 2025. Litwin, who previously led Global Industrial Company, brings extensive experience in industrial distribution and multi-channel strategies. His appointment is expected to drive TestEquity’s growth through enhanced digital channels and customer experience. The transition follows the tenure of Russ Frazee, who significantly expanded TestEquity’s operations and will continue in an advisory role to ensure a smooth leadership transition.

The most recent analyst rating on (DSGR) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Distribution Solutions Group stock, see the DSGR Stock Forecast page.

Distribution Solutions Group Holds Annual Stockholder Meeting

On May 22, 2025, Distribution Solutions Group, Inc. held its 2025 Annual Meeting of Stockholders, where 96.1% of the eligible shares were represented. During the meeting, stockholders voted on three proposals: the election of directors to the Board, the ratification of Grant Thornton, LLP as the independent registered public accounting firm for 2025, and an advisory vote on executive compensation, all of which were approved.

The most recent analyst rating on (DSGR) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Distribution Solutions Group stock, see the DSGR Stock Forecast page.