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Diploma PLC (GB:DPLM)
LSE:DPLM

Diploma (DPLM) AI Stock Analysis

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GBDiploma
(LSE:DPLM)
68Neutral
Diploma PLC demonstrates strong financial performance with robust revenue growth and effective cash flow management, contributing positively to its stock score. However, the high P/E ratio suggests potential overvaluation concerns, and technical indicators point to short-term volatility. While recent board changes are positive, they do not significantly impact the score.
Positive Factors
Financial Performance
Diploma has released strong FY24A results, with adj. operating profit +20% to £285m, c.1% ahead of consensus.
Mergers and Acquisitions
Peerless acquisition is performing well and ahead of expectations, and is expected to exceed 20% ROATCE in its first year in the group.
Negative Factors
Valuation
The stock is trading on a one-year forward P/E of c.28.3x, slightly above the five-year average.

Diploma (DPLM) vs. S&P 500 (SPY)

Diploma Business Overview & Revenue Model

Company DescriptionDiploma PLC is a UK-based international group specializing in the distribution of specialized technical products and services. Operating across three main sectors—Life Sciences, Seals, and Controls—the company provides essential components and services to a diverse range of industries. In Life Sciences, Diploma offers consumables and instrumentation to the healthcare and environmental industries. The Seals sector supplies aftermarket sealing products and kits for heavy mobile machinery and industrial equipment. The Controls segment delivers wiring, connectors, and fasteners for applications in aerospace, defense, and other industrial markets.
How the Company Makes MoneyDiploma PLC generates revenue primarily from the distribution and sale of specialized technical products and services across its three core sectors. In the Life Sciences sector, revenue is earned through the sale of consumables, instrumentation, and related services to healthcare and environmental industries, often involving long-term supply contracts and recurring sales. The Seals sector makes money by providing aftermarket sealing products, which are critical for maintenance and repair operations in heavy mobile machinery and industrial equipment, ensuring a steady demand. The Controls sector contributes to revenue through the sale of wiring, connectors, and fasteners, with strong ties to industries such as aerospace and defense, where reliability and quality are paramount. The company's earnings are further enhanced by strategic partnerships with manufacturers and through its focus on delivering high-value, high-margin products, along with value-added services such as technical support and logistics management.

Diploma Financial Statement Overview

Summary
Income Statement
Balance Sheet
Cash Flow
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.26B1.36B1.20B1.01B787.40M538.40M
Gross Profit
428.50M628.90M261.00M335.30M288.40M194.40M
EBIT
196.90M207.40M187.60M148.80M114.00M71.70M
EBITDA
263.00M294.30M254.00M203.50M138.40M99.80M
Net Income Common Stockholders
116.10M129.30M117.70M94.70M69.80M49.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
55.50M55.50M62.40M41.70M24.80M206.80M
Total Assets
1.77B1.77B1.59B1.39B994.00M703.30M
Total Debt
552.10M552.10M397.30M439.70M254.50M33.70M
Net Debt
496.60M496.60M334.90M398.00M229.70M-173.10M
Total Liabilities
877.40M877.40M687.30M721.50M453.00M172.60M
Stockholders Equity
888.00M888.00M895.60M662.00M536.30M527.00M
Cash FlowFree Cash Flow
180.00M178.40M166.10M109.60M109.90M76.00M
Operating Cash Flow
202.30M198.10M189.20M125.00M116.10M85.40M
Investing Cash Flow
-213.30M-294.80M-270.90M-172.20M-447.70M-17.70M
Financing Cash Flow
2.70M90.30M107.50M64.70M139.00M114.20M

Diploma Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4400.00
Price Trends
50DMA
4420.82
Negative
100DMA
4391.98
Positive
200DMA
4309.04
Positive
Market Momentum
MACD
2.90
Positive
RSI
39.34
Neutral
STOCH
12.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DPLM, the sentiment is Neutral. The current price of 4400 is below the 20-day moving average (MA) of 4579.00, below the 50-day MA of 4420.82, and above the 200-day MA of 4309.04, indicating a neutral trend. The MACD of 2.90 indicates Positive momentum. The RSI at 39.34 is Neutral, neither overbought nor oversold. The STOCH value of 12.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:DPLM.

Diploma Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
£10.49B36.4815.48%0.79%11.94%20.48%
68
Neutral
£5.90B45.6114.56%1.32%13.59%6.14%
GBRSW
67
Neutral
£2.06B21.0810.72%2.62%4.71%0.43%
62
Neutral
$8.11B13.341.17%3.02%4.16%-15.14%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:DPLM
Diploma
4,400.00
1,031.14
30.61%
GB:RSW
Renishaw
2,830.00
-1,422.04
-33.44%
GB:HLMA
Halma plc
2,770.00
484.81
21.22%

Diploma Corporate Events

Executive/Board Changes
Diploma PLC Announces New Non-Executive Director Appointment
Positive
Mar 3, 2025

Diploma PLC announced the appointment of Ian El-Mokadem as a Non-Executive Director to the Board and several committees of United Utilities Group PLC, effective from June 1, 2025. This strategic appointment highlights Diploma PLC’s commitment to strengthening its leadership and governance, potentially enhancing its industry positioning and stakeholder confidence.

M&A TransactionsRegulatory Filings and Compliance
Diploma PLC Announces Change in Voting Rights
Neutral
Feb 25, 2025

Diploma PLC, a UK-based company, has announced a change in its voting rights structure due to an acquisition or disposal by FMR LLC, a firm registered in Boston, USA. The notification reveals that FMR LLC’s voting rights in Diploma PLC have decreased from 5.1958% to 4.9822%, indicating a slight reduction in their stake. This adjustment in voting rights could potentially impact the company’s governance dynamics and influence from its stakeholders.

Business Operations and StrategyRegulatory Filings and Compliance
Diploma PLC Announces Update on Major Shareholder Holdings
Neutral
Feb 14, 2025

Diploma PLC has announced a voluntary disclosure regarding an update in the chain of corporations controlled by its substantial shareholder, FMR LLC. This update indicates a slight increase in voting rights from 5.06% to 5.1958%, amounting to 6,971,520 total voting rights. This change could potentially impact the company’s shareholder dynamics and influence FMR LLC’s stake in Diploma PLC’s decision-making processes, reflecting a strategic move in aligning its holdings more effectively.

Other
Diploma PLC Shareholder Structure Update: Norges Bank Adjusts Voting Rights
Neutral
Feb 14, 2025

Diploma PLC announced a change in its shareholder structure as Norges Bank has adjusted its voting rights, reducing from 3.015160% to 2.974780% as of February 12, 2025. This change in voting rights indicates a slight divestment by Norges Bank, which may influence the company’s governance dynamics or investor confidence.

Diploma PLC Director Jennifer Ward Purchases 1,000 Shares
Jan 17, 2025

Diploma PLC announced that Jennifer Ward, a Non-Executive Director of the company, has purchased 1,000 ordinary shares. This transaction highlights the confidence of the board members in the company’s prospects. The purchase was made on the London Stock Exchange at a price of £42.50 per share, and this move aligns with the regulatory requirements under the UK Market Abuse Regulation.

Diploma PLC AGM Resolutions Passed with Strong Support
Jan 15, 2025

Diploma PLC, a prominent company, successfully conducted its Annual General Meeting where all resolutions proposed to shareholders were approved by poll votes. These resolutions included a final dividend, re-elections, and other strategic financial measures, reflecting strong shareholder support and potentially enhancing the company’s market operations and governance standing.

Diploma PLC Announces Robust Q1 Performance, Maintains Full-Year Outlook
Jan 15, 2025

Diploma PLC reported a strong start to the fiscal year, with a 7% organic revenue growth and a total reported revenue growth of 12% for the first quarter ending December 31, 2024. The growth was driven by acquisitions and a robust operating margin, despite a slight negative impact from foreign exchange. The company maintained its full-year guidance, reflecting confidence in achieving a 6% organic revenue growth, 2% net acquisition growth, and a strong operating margin of approximately 21%. This performance strengthens Diploma’s position in the distribution industry and reassures stakeholders of its continued financial health and strategic momentum.

Diploma PLC Director Acquires Shares, Reinforcing Governance Standards
Jan 10, 2025

Diploma PLC announced that Janice Stipp, a Non-Executive Director, has purchased 700 Ordinary Shares of the company, valued at $56.86 per share, on December 13, 2024. This transaction was carried out in compliance with the UK Market Abuse Regulation, indicating the company’s adherence to legal and regulatory standards, potentially enhancing stakeholder confidence in its governance practices.

Diploma CFO Acquires Shares with Annual Bonus
Dec 23, 2024

Diploma PLC has announced that Chris Davies, its Chief Financial Officer, acquired 3,917 ordinary shares in the company. The shares were purchased at a price of £42.80 each, using 50% of his annual bonus for FY2024, net of tax, and will be held through the Diploma Employee Benefit Trust in line with the company’s Shareholding Policy. This transaction aligns with the UK Market Abuse Regulation and reflects the CFO’s vested interest in the company’s future performance.

Diploma PLC Releases Annual Report and AGM Notice
Dec 9, 2024

Diploma PLC has released its Annual Report and Accounts for the year ending September 2024, along with the notice for its upcoming Annual General Meeting on January 15, 2025. These documents are now accessible to shareholders online and through the National Storage Mechanism, providing insights into the company’s financial performance and strategic outlook.

Diploma PLC Sees Increased Investment from Capital Group
Dec 5, 2024

Diploma PLC has announced that The Capital Group Companies, Inc. has increased its stake in the company, reaching a 13% share of voting rights as of November 26, 2024. This change in holdings highlights the growing interest and investment from major financial groups in Diploma PLC. Such moves are often closely watched by stock market enthusiasts as they can signal confidence in the company’s future performance.

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.