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DXP Enterprises (DXPE)
NASDAQ:DXPE
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DXP Enterprises
(NASDAQ:DXPE)
80Outperform
DXP Enterprises (DXPE) vs. S&P 500 (SPY)
Market Cap
$1.24B
Dividend YieldN/A
Average Volume (3M)167.72K
Price to Earnings (P/E)18.7
Beta (1Y)1.45
Revenue Growth7.35%
EPS Growth9.35%
CountryUS
Employees3,028
SectorIndustrials
Sector Strength75
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)1.38
Shares Outstanding15,695,088
10 Day Avg. Volume135,944
30 Day Avg. Volume167,715
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.76
Price to Cash Flow (P/CF)10.60
P/FCF Ratio9.40
Enterprise Value/Market Cap1.15
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.56
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$95.00Price Target Upside7.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
DXP Enterprises Business Overview & Revenue Model
Company DescriptionDXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to the energy and industrial customers primarily in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory management solutions; and offers outsourced MRO solutions for sourcing MRO products, including inventory optimization and management, store room management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages, remanufactures pumps, and manufactures branded private label pumps. The company was founded in 1908 and is based in Houston, Texas.
How the Company Makes MoneyDXP Enterprises generates revenue primarily through the distribution of industrial products and services across its three main business segments. In the Service Centers segment, DXP sells a diverse portfolio of maintenance, repair, and operating (MRO) products directly to customers, ensuring the continuous operation of their facilities. The Supply Chain Services segment provides outsourced procurement and inventory management solutions, allowing clients to streamline their operations and reduce costs. Innovative Pumping Solutions focuses on custom engineering and fabrication of pump packages, targeting industries such as oil and gas, petrochemicals, and water management. DXP's earnings are bolstered by its ability to provide comprehensive solutions and maintain strategic partnerships with top manufacturers, which enhances its product offerings and market reach.
DXP Enterprises Financial Statement Overview
Summary
DXP Enterprises exhibits strong financial health with robust revenue growth and improving profitability margins. The company's balance sheet shows reduced leverage and a solid equity position. Cash flow generation remains strong, despite a slight decline in free cash flow.Income Statement
DXP Enterprises has shown consistent revenue growth, with a 7.35% increase from 2023 to 2024 and a 13.36% increase from 2022 to 2023. The gross profit margin improved slightly from 30.10% in 2023 to 30.87% in 2024, indicating efficient cost management. Net profit margin also increased from 4.10% in 2023 to 3.90% in 2024, reflecting improved profitability. EBIT and EBITDA margins are stable, showcasing operational efficiency.85
Very Positive
Balance Sheet
The debt-to-equity ratio improved significantly from 1.51 in 2023 to 0.13 in 2024, indicating better financial leverage. Return on Equity (ROE) also increased from 18.06% in 2023 to 16.64% in 2024, showing effective use of equity to generate profits. The equity ratio improved from 32.35% in 2023 to 31.33% in 2024, suggesting a stronger equity base.78
Positive
Cash Flow
Free cash flow growth rate decreased by 17.89% from 2023 to 2024, but the company maintained a strong operating cash flow to net income ratio of 1.45 in 2024, indicating solid cash generation relative to earnings. Free cash flow to net income ratio is high at 1.10, reflecting strong cash conversion.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.80B | 1.68B | 1.48B | 1.11B | 1.01B | Gross Profit |
| 556.28M | 505.29M | 422.04M | 328.51M | 279.27M | EBIT |
| 145.38M | 139.32M | 64.69M | 13.13M | 10.26M | EBITDA |
| 182.30M | 169.43M | 123.54M | 67.41M | -5.06M | Net Income Common Stockholders |
| 70.40M | 68.81M | 48.16M | 16.50M | -29.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 148.32M | 173.12M | 46.03M | 48.99M | 117.35M | Total Assets |
| 1.35B | 1.18B | 1.04B | 906.19M | 851.86M | Total Debt |
| 54.67M | 575.97M | 471.85M | 376.82M | 374.34M | Net Debt |
| -93.64M | 402.85M | 425.82M | 327.83M | 256.99M | Total Liabilities |
| 926.71M | 796.56M | 671.89M | 547.50M | 504.00M | Stockholders Equity |
| 422.79M | 380.88M | 365.39M | 358.64M | 347.07M |
| Cash Flow | Free Cash Flow | |||
| 77.14M | 93.96M | 978.00K | 31.09M | 101.00M | Operating Cash Flow |
| 102.21M | 106.22M | 5.89M | 37.09M | 107.67M | Investing Cash Flow |
| -181.69M | -22.65M | -53.42M | -69.02M | -121.80M | Financing Cash Flow |
| 56.80M | 43.58M | 44.31M | -38.49M | 77.41M |
DXP Enterprises Technical Analysis
Positive
88.46
Price Trends
83.83
Positive
87.41
Positive
71.20
Positive
Market Momentum
0.78
Negative
60.22
Neutral
96.77
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXPE, the sentiment is Positive. The current price of 88.46 is above the 20-day moving average (MA) of 80.51, above the 50-day MA of 83.83, and above the 200-day MA of 71.20, indicating a bullish trend. The MACD of 0.78 indicates Negative momentum. The RSI at 60.22 is Neutral, neither overbought nor oversold. The STOCH value of 96.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DXPE.
DXP Enterprises Risk Analysis
DXP Enterprises disclosed 37 risk factors in its most recent earnings report. DXP Enterprises 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
DXP Enterprises Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.24B | 18.71 | 17.54% | ― | 7.35% | 9.35% | |
76 Outperform | $9.34B | 24.63 | 22.70% | 0.65% | 0.37% | 3.52% | |
74 Outperform | $845.48M | 13.97 | 22.49% | 4.55% | -0.79% | -13.50% | |
72 Outperform | $4.26B | 20.13 | 15.53% | 4.36% | -5.71% | -31.93% | |
63 Neutral | $4.23B | 11.54 | 5.34% | 209.77% | 4.14% | -9.49% | |
63 Neutral | $205.75M | 33.12 | 4.73% | ― | -1.93% | -0.69% | |
63 Neutral | $1.21B | 760.60 | -1.13% | ― | 14.88% | 9.87% |
* Industrials Sector Average
Performance Comparison
DXPE
DXP Enterprises
88.46
38.79
78.10%
AIT
Applied Industrial Technologies
243.28
63.89
35.62%
EVI
EVI Industries
16.13
-5.19
-24.34%
DSGR
Distribution Solutions Group
26.04
-6.28
-19.43%
MSM
MSC Industrial
76.48
-10.66
-12.23%
GIC
Global Industrial Company
25.68
-7.67
-23.00%
DXP Enterprises Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q4-2024)
| % Change Since: 12.76%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Positive
DXP Enterprises reported a strong fiscal year 2024 with record sales and significant growth in key segments, particularly through acquisitions and diversification strategies. Despite some challenges in Supply Chain Services and increased operating expenses, the company maintained strong margins and cash flow, positioning itself well for future growth.Q4-2024 Updates
Positive Updates
Record Sales and Growth
DXP Enterprises achieved record sales growth in fiscal year 2024, with a 7.4% increase to $1.8 billion. Innovative Pumping Solutions led the way with a 47.7% year-over-year increase.
Improved Gross and EBITDA Margins
Gross profit margins increased by 77 basis points to 30.9%, and adjusted EBITDA margins remained above 10% for the second consecutive year, reaching 10.62%.
Successful Acquisitions and Diversification
DXP completed 7 acquisitions in fiscal 2024, contributing significantly to sales growth and diversification, particularly in the water and wastewater sectors.
Strong Free Cash Flow and ROIC
Generated $77 million in free cash flow and achieved a return on invested capital (ROIC) of 39%, demonstrating strong financial management.
Debt Refinancing and Share Repurchase
Successfully refinanced Term Loan B, reducing interest costs by 100 basis points, and repurchased $28.8 million in shares.
Positive Sales Trends
Sales per business day improved throughout the year, concluding Q4 with $7.595 million per day, and continued strong sales into Q1 2025.
Negative Updates
Challenges in Supply Chain Services
Supply Chain Services experienced a slight decline of 1.5% year-over-year, primarily due to customer facility closures and declines in energy-related sites.
Increased SG&A Expenses
SG&A expenses increased by $44.3 million from fiscal 2023 to $410.9 million, reflecting growth-related costs and compensation.
Impact of Inflation and Tariffs
Potential headwinds from tariffs and inflationary pressures were mentioned, although DXP has strategies to mitigate their impact.
Company Guidance
In the DXP Enterprises Fourth Quarter 2024 Earnings Release Conference Call, a range of financial metrics and strategies were discussed by CEO David Little and CFO Kent Yee. The company achieved a record fiscal year with sales rising by 7.4% to $1.8 billion and adjusted EBITDA reaching $191 million, marking the second fiscal year with adjusted EBITDA margins over 10%, specifically 10.62%. Gross profit margins improved by 77 basis points to 30.9%, while operating income increased by 4.8%. Key growth drivers included Innovative Pumping Solutions, which saw a 47.7% increase, and strategic acquisitions, with seven completed in 2024. DXP's end-market diversification was emphasized, with oil and gas comprising 23% of the business, and the water and wastewater sector growing to 44% of Innovative Pumping Solutions sales. The company's focus on capital allocation and growth through acquisitions was supported by refinancing efforts that raised $105 million and reduced interest costs by 100 basis points. Looking forward, DXP aims to maintain high margins and continue growing both organically and through further acquisitions, anticipating a strong performance in fiscal 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.