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DXP Enterprises (DXPE)
NASDAQ:DXPE
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DXP Enterprises
(NASDAQ:DXPE)
Rating:77Outperform
Price Target:
$97.00
▲( 16.03% Upside)
DXP Enterprises (DXPE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.31B
Dividend YieldN/A
Average Volume (3M)101.30K
Price to Earnings (P/E)17.4
Beta (1Y)1.40
Revenue Growth11.94%
EPS Growth34.08%
CountryUS
Employees3,028
SectorIndustrials
Sector Strength90
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)1.26
Shares Outstanding15,694,140
10 Day Avg. Volume104,968
30 Day Avg. Volume101,300
Financial Highlights & Ratios
PEG Ratio2.02
Price to Book (P/B)3.05
Price to Sales (P/S)0.00
P/FCF Ratio16.74
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$95.00Price Target Upside13.64% 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
Negative
83.60
Price Trends
84.39
Negative
88.92
Negative
74.15
Positive
Market Momentum
0.72
Positive
43.34
Neutral
38.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXPE, the sentiment is Negative. The current price of 83.6 is below the 20-day moving average (MA) of 88.18, below the 50-day MA of 84.39, and above the 200-day MA of 74.15, indicating a neutral trend. The MACD of 0.72 indicates Positive momentum. The RSI at 43.34 is Neutral, neither overbought nor oversold. The STOCH value of 38.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 2 New Risks
1.
Changes in estimates related to revenues and costs associated with our contracts with customers could result in a reduction or elimination of revenues, a reduction of profits or the recognition of losses. Q4, 2024
2.
A variety of issues could affect the timing or profitability of our projects, which may result in additional costs to us, reductions or delays in revenues, the payment of liquidated damages or project termination. Q4, 2024
DXP Enterprises Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.31B | 17.39 | 19.45% | ― | 11.94% | 34.08% | |
74 Outperform | $1.01B | 16.61 | 22.15% | 3.81% | -0.79% | -13.64% | |
72 Outperform | $8.50B | 22.39 | 22.23% | 0.70% | 0.50% | 4.48% | |
69 Neutral | $4.53B | 21.38 | 15.53% | 4.28% | -5.71% | -31.93% | |
65 Neutral | $1.25B | 1,677.02 | 0.18% | ― | 13.91% | ― | |
64 Neutral | $4.39B | 11.81 | 5.17% | 249.38% | 3.98% | -12.17% | |
63 Neutral | $240.76M | 38.15 | 4.71% | ― | 3.51% | 33.35% |
* Industrials Sector Average
Performance Comparison
DXPE
DXP Enterprises
83.60
34.00
68.55%
AIT
Applied Industrial Technologies
223.24
28.88
14.86%
EVI
EVI Industries
18.10
-3.49
-16.16%
DSGR
Distribution Solutions Group
27.00
-9.32
-25.66%
MSM
MSC Industrial
79.06
-5.58
-6.59%
GIC
Global Industrial Company
26.38
-7.77
-22.75%
DXP Enterprises Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -5.83%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong start to 2025 with significant sales growth and successful acquisition strategies. While there are concerns about tariff impacts and increased working capital affecting cash flow, the company remains optimistic about continued growth and market resilience.Q1-2025 Updates
Positive Updates
Strong Financial Performance
First quarter adjusted EBITDA of $52.5 million and adjusted diluted earnings per share of $1.26, supported by year-over-year sales growth of 15.5% and sequential sales growth of 1.2%.
Successful Acquisition Strategy
DXP closed one acquisition in the first quarter, Arroyo Process Equipment, contributing $31.1 million in sales. Two additional acquisitions are anticipated by the end of the second quarter.
Innovative Pumping Solutions Growth
Innovative Pumping Solutions led sales growth at 38.5% year-over-year, driven by strength in DXP Water and an increase in energy backlog.
Service Centers Sales Record
Service Centers established a new high water mark with sales at $327 million, growing 13.4% year-over-year.
Gross Margin Improvement
Gross margins improved by 151 basis points to 31.5% year-over-year, reflecting strong segment performance and favorable acquisition contribution.
Negative Updates
Tariff Uncertainty
Rising uncertainty around tariffs could impact demand, with concerns over potentially high tariffs like 145% affecting purchasing decisions.
Working Capital Increase
Working capital increased by $34.3 million, with accounts receivable growing and DSO days increasing to 70 days.
Negative Free Cash Flow
Cash flow from operations was $3 million in Q1, significantly lower than $27 million in Q1 of the previous year, mainly due to increased receivables and deferred tax payments.
Company Guidance
During the first quarter of fiscal year 2025, DXP Enterprises reported strong financial performance, highlighting key metrics such as an adjusted EBITDA of $52.5 million and adjusted diluted earnings per share of $1.26. The company achieved a year-over-year sales growth of 15.5% and a sequential sales growth of 1.2%, with total sales reaching $476.6 million. Organic growth contributed 11.1% year-over-year, bolstered by acquisitions contributing $31.1 million in sales. Notably, the Innovative Pumping Solutions segment grew by 38.5% year-over-year, Service Centers by 13.4%, and Supply Chain Services by 2.1%. The company also closed one acquisition, Arroyo Process Equipment, during the quarter, as part of its strategy to diversify and expand its market reach. Despite macroeconomic challenges such as tariffs, DXP maintained robust demand across its broad industrial markets, with an average daily sales rate of $7.6 million per business day. The company reported a gross margin improvement of 151 basis points to 31.5% and continues to focus on strategic investments to drive long-term shareholder value.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.