Distribution Solutions Group (DSGR) AI Stock Analysis

• Market Cap: $1.48B
• Dividend Yield: N/A
• Average Volume (3M): 55.25K
• Price to Earnings (P/E): 381.6
• Beta (1Y): 0.89
• Revenue Growth: 13.48%
• EPS Growth: N/A
• Country: US
• Employees: 4,400
• Sector: Industrials
• Sector Strength: 74
• Industry: Industrial - Distribution
• EPS (TTM): 0.11
• Shares Outstanding: 46,275,093
• 10 Day Avg. Volume: 46,778
• 30 Day Avg. Volume: 55,250
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 3.19
• Enterprise Value/Ebitda: 14.31
• 1Y Price Target: $38.50
• Price Target Upside: 20.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: $36.00 ▲(12.57% Upside)

Distribution Solutions Group's overall score reflects strong technical momentum and positive corporate developments, offset by high valuation concerns and profitability challenges. The company's financial performance shows growth and operational improvements, but tight net margins and cash flow management issues need addressing. The earnings call provided a balanced outlook with both positive growth indicators and market challenges.

Positive Factors

Financial Performance

Q2/25 revenue increased 14.3% YOY to $502.4 million, which exceeded the estimate and consensus.

Segment Performance

The Gexpro Services segment continued to be a standout performer with organic revenue growth of 18.2%, benefiting from momentum in the renewable energy, aerospace & defense, and technology markets.

Negative Factors

Economic Uncertainty

TestEquity segment revenue was down slightly (-1.3% YOY) due to customer uncertainty about the economy and tariff policy.

Market Demand

Revenue in the Lawson Products segment was down -1.0% YOY organically due to lower sales volume in the military market amidst a more austere approach to government spending.

Distribution Solutions Group Business Overview & Revenue Model

Company Description

Distribution Solutions Group (DSGR) is a leading provider of innovative distribution and supply chain solutions, specializing in the wholesale distribution of a diverse range of products across various sectors, including food service, healthcare, and retail. The company leverages advanced technology and logistics expertise to optimize inventory management and streamline operations for its clients, ensuring timely and efficient delivery of goods. DSGR's core offerings include procurement services, warehousing, transportation, and value-added services designed to enhance the overall supply chain experience.

How the Company Makes Money

Distribution Solutions Group generates revenue primarily through its distribution services, which include the sale of products and logistics solutions to a broad customer base. Key revenue streams include wholesale product sales, transportation and logistics fees, and value-added services such as inventory management and consulting. The company also benefits from strategic partnerships with suppliers and manufacturers, allowing it to offer competitive pricing and exclusive products. Additionally, DSGR's focus on technology-driven solutions enables it to streamline operations for clients, resulting in long-term contracts and repeat business, further bolstering its earnings.

Distribution Solutions Group Financial Statement Overview

Summary

Distribution Solutions Group shows strong revenue growth and improved operational efficiency, though profitability remains a concern with tight net margins. The balance sheet reflects a healthier leverage position with improved equity ratios, while cash flow management shows strong operational cash generation but requires better control over free cash flow.

Income Statement

Distribution Solutions Group shows strong revenue growth with a 22.71% increase from 2023 to TTM (Trailing-Twelve-Months). The gross profit margin is robust at 33.85% for TTM, indicating efficient production and sales processes. However, the net profit margin is low at 0.22% for TTM, suggesting challenges in cost management and profitability. EBIT and EBITDA margins have improved over the years, indicating better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has decreased significantly to 0.23 in TTM, showing a solid reduction in leverage and improved financial stability. The return on equity (ROE) is low at 0.66% in TTM, reflecting challenges in generating returns for shareholders. The equity ratio has improved to 37.06% in TTM, indicating a stable financial position with a strong equity base.

Cash Flow

Free cash flow shows a decrease from 2023 to TTM, with a negative growth rate of -10.58%, indicating potential issues in cash generation. The operating cash flow to net income ratio is high at 13.37 in TTM, demonstrating strong cash generation relative to net income. However, further improvement in free cash flow management is needed to enhance financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.93B	1.80B	1.57B	1.15B	417.73M	351.59M
Gross Profit	641.25M	613.77M	551.88M	390.90M	219.24M	186.54M
EBITDA	142.90M	55.95M	104.36M	82.42M	30.68M	28.14M
Net Income	4.26M	-7.33M	-8.97M	7.41M	9.41M	15.11M
Balance Sheet
Total Assets	1.75B	1.73B	1.55B	1.22B	256.16M	256.30M
Cash, Cash Equivalents and Short-Term Investments	47.43M	66.48M	83.93M	24.55M	4.18M	28.39M
Total Debt	827.21M	831.09M	649.05M	461.97M	27.21M	10.31M
Total Liabilities	1.10B	1.09B	888.73M	652.62M	123.15M	133.88M
Stockholders Equity	649.38M	640.54M	661.60M	563.00M	133.01M	122.42M
Cash Flow
Free Cash Flow	38.24M	42.77M	77.61M	-31.13M	-2.74M	30.84M
Operating Cash Flow	56.98M	56.45M	102.29M	-11.03M	5.45M	32.53M
Investing Cash Flow	-139.30M	-229.68M	-278.52M	-126.69M	-41.19M	-3.99M
Financing Cash Flow	87.03M	159.30M	250.41M	148.46M	10.66M	-5.77M

Distribution Solutions Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 31.98 is below the 20-day moving average (MA) of 32.22, above the 50-day MA of 30.30, and above the 200-day MA of 30.65, indicating a neutral trend. The MACD of 0.49 indicates Positive momentum. The RSI at 54.07 is Neutral, neither overbought nor oversold. The STOCH value of 32.06 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	80 Outperform	$1.97B	23.74	20.33%	―	13.93%	48.25%
AIT	79 Outperform	$10.12B	26.47	22.24%	0.65%	1.88%	2.91%
GIC	79 Outperform	$1.47B	22.37	22.72%	2.72%	-1.58%	-5.62%
MSM	75 Outperform	$5.16B	25.47	14.34%	3.68%	-4.11%	-31.26%
GWW	75 Outperform	$49.17B	25.71	55.30%	0.87%	4.35%	7.84%
DSGR	71 Outperform	$1.48B	381.62	0.65%	―	13.48%	―
Sector *	64 Neutral	$10.73B	15.74	7.56%	2.01%	2.76%	-15.10%

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.

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.