Diploma (DPLM) AI Stock Analysis

• Market Cap: £7.80B
• Dividend Yield: 1.13%
• Average Volume (3M): 312.85K
• Price to Earnings (P/E): 38.5
• Beta (1Y): 1.10
• Revenue Growth: 11.82%
• EPS Growth: 42.93%
• Country: UK
• Employees: 3,597
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.66
• Shares Outstanding: 134,317,400
• 10 Day Avg. Volume: 285,214
• 30 Day Avg. Volume: 312,846
• PEG Ratio: 0.88
• Price to Book (P/B): 7.19
• Price to Sales (P/S): 4.67
• P/FCF Ratio: 28.09
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £6,561.03
• Price Target Upside: 10.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.18
• Revenue Forecast (FY): £1.70B

• Rating: 66 Neutral
• Price Target: 6,399.00 p ▲(8.00% Upside)
• Action: Downgraded Date: 12/18/25
• Date: Action: Downgraded 12/18/25

Diploma's overall stock score is driven by its strong financial performance, which is the most significant factor, reflecting robust growth and cash generation. However, technical analysis indicates bearish momentum, and valuation metrics suggest the stock may be overvalued, which could limit future gains. The absence of earnings call insights and corporate events means these factors did not influence the score.

Positive Factors

Revenue and Profit Growth

Diploma's near-40% year-over-year revenue jump and improved gross and net margins indicate durable demand and scalable operations. Sustained top-line expansion combined with margin gains supports reinvestment, portfolio expansion and long-term earnings durability over the next several quarters.

Strong Cash Generation

Robust free cash flow and high operating-cash-to-net-income conversion give Diploma long-term flexibility to fund acquisitions, capital expenditure and shareholder returns without relying heavily on external finance, strengthening resilience across economic cycles.

Capital Efficiency & Balance Sheet Stability

Strong ROE reflects efficient use of shareholder capital and disciplined operations. A generally stable balance sheet and solid equity base support strategic investments and absorb shocks, helping sustain growth even if leverage needs modest future adjustment.

Negative Factors

Rising Leverage

A gradual increase in leverage reduces financial flexibility and raises interest-cost sensitivity. If rates rise or cash generation weakens, debt service could constrain capital allocation, limit M&A or share returns, and increase downside risk over the medium term.

Modest Dividend Yield

A low dividend yield makes Diploma less attractive to income-focused investors and places more emphasis on capital growth to deliver returns. In periods of slower growth, modest yield reduces the stock's defensive income appeal relative to higher-yielding peers.

Industry Cyclicality

As an industrial distributor, Diploma's revenues and margins are exposed to industrial and capital spending cycles. Structural sensitivity to economic downturns can amplify revenue volatility and pressure margins across multiple quarters, challenging predictable earnings.

Diploma Business Overview & Revenue Model

Company Description

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, rest of Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies clinical diagnostics instrumentation and products, consumables, specialty surgical devices, and related consumables and services to public hospitals, private clinics, pathology laboratories, scientific research, and medical segments; surgical equipment for hospital operating rooms; and distributes laboratory diagnostics, specialty medical devices, devices, equipment, and patient monitoring technologies used in operating theatres, as well as medically supervised nutrition. It also provides supplies specialist containment solutions and analyzers for chemical, petrochemical, environmental research, and pharmaceutical technology. The Seals sector supplies various seals, gaskets, filters, cylinders, components, and kits used in heavy mobile machinery and specialized industrial equipment; and O-rings, custom molded and machined parts, fluid sealing products, and hydraulic cylinder components. The Controls sector offers cable identification, termination, and management products, and cable products; low voltage cables and cable management solutions; harness components and specialist connectors, including protective sleevings, cut-to-length tubing, kitting, connector assemblies, and prototype quantities of customized multi-core cables; fasteners and related technical support, and other value-added services for civil aerospace, motorsport, defense, and general industries, as well as supports customers with automated inventory replenishment solutions; fluid controllers, compressors, valves, temperature and pressure measurement devices, and liquid dispensing components; and silicones, adhesives, and sealants. Diploma PLC was incorporated in 1931 and is based in London, the United Kingdom.

Diploma Financial Statement Overview

Summary

Diploma's financial statements collectively indicate strong growth, profitability, and cash generation capabilities. The income statement shows impressive revenue and profit growth, while the balance sheet reveals a stable financial position with some leverage concerns. The cash flow statement underscores strong liquidity and cash management. Overall, Diploma is well-positioned for continued success, though attention to leverage is advisable.

Income Statement

Diploma has demonstrated strong revenue growth with a 39.95% increase in the latest year, indicating robust demand and market expansion. The gross profit margin has improved significantly, reflecting efficient cost management. The net profit margin is healthy, and both EBIT and EBITDA margins show strong operational performance. Overall, the income statement reflects a company on a positive growth trajectory with solid profitability.

Balance Sheet

The balance sheet shows a stable financial position with a manageable debt-to-equity ratio, although it has increased slightly over the years. Return on equity is strong, indicating effective use of shareholder funds. The equity ratio suggests a solid capital structure, though there is room for improvement in reducing leverage. Overall, the balance sheet reflects stability with some leverage concerns.

Cash Flow

Diploma's cash flow statement highlights impressive free cash flow growth, indicating strong cash generation capabilities. The operating cash flow to net income ratio is robust, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio is also strong, further supporting the company's ability to generate cash. Overall, the cash flow statement reflects strong liquidity and cash management.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.52B	1.36B	1.20B	1.01B	787.40M
Gross Profit	377.70M	628.90M	261.00M	335.30M	288.40M
EBITDA	368.60M	296.10M	254.00M	203.50M	138.40M
Net Income	184.90M	129.30M	117.70M	94.70M	69.80M
Balance Sheet
Total Assets	1.86B	1.77B	1.59B	1.39B	994.00M
Cash, Cash Equivalents and Short-Term Investments	81.70M	55.50M	62.40M	41.70M	24.80M
Total Debt	464.90M	552.10M	397.30M	439.70M	254.50M
Total Liabilities	862.60M	877.40M	687.30M	721.50M	453.00M
Stockholders Equity	989.70M	888.00M	895.60M	662.00M	536.30M
Cash Flow
Free Cash Flow	253.20M	178.40M	166.10M	109.60M	109.90M
Operating Cash Flow	267.60M	198.10M	189.20M	125.00M	116.10M
Investing Cash Flow	-31.30M	-294.80M	-270.90M	-172.20M	-447.70M
Financing Cash Flow	-212.90M	90.30M	107.50M	64.70M	139.00M

Diploma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5925.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DPLM, the sentiment is Positive. The current price of 5925 is above the 20-day moving average (MA) of 5403.25, above the 50-day MA of 5448.97, and above the 200-day MA of 5290.17, indicating a bullish trend. The MACD of -50.90 indicates Negative momentum. The RSI at 67.21 is Neutral, neither overbought nor oversold. The STOCH value of 35.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:DPLM.

Diploma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RS1	74 Outperform	£2.77B	8.02	11.47%	3.58%	-2.44%	-6.43%
DPLM	66 Neutral	£7.80B	38.47	14.17%	1.13%	11.82%	42.93%
LTHP	64 Neutral	£200.89M	0.64	7.92%	6.53%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLO	51 Neutral	£36.06M	-70.33	-64.09%	―	-0.25%	-84.33%
SHI	47 Neutral	£87.30M	-1.82	-47.73%	―	-2.08%	-9.83%

Diploma Corporate Events

Diploma lifts FY26 outlook on strong trading and margin gains

Diploma has significantly upgraded its full-year 2026 guidance on the back of strong trading, lifting expected organic revenue growth to 9% from 6% and raising its operating margin target to around 25%. The changes imply about a 13% upgrade to consensus operating profit and earnings growth of more than 20%, underpinned by sustained momentum in the first half and confidence in the second.

Growth is broad-based across its diversified portfolio, with standout performance at aerospace-focused Peerless, robust gains at IS Group, Clarendon and Windy City Wire, and resilient life sciences operations offsetting softer conditions in International Seals. Margin expansion is being driven by accretive contributions from Peerless and other units, while recent acquisitions worth about £130m and a healthy pipeline signal continued buy-and-build execution and support Diploma’s positioning as a high-return compounder.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6550.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Strengthens Board with Appointment of Cheri Phyfer as Independent Non-Executive Director

Diploma PLC has appointed Cheri Phyfer as an independent non-executive director effective 2 March 2026, with roles on the Nomination and Remuneration Committees. Phyfer brings more than 30 years of industry experience, including senior leadership posts at Fortune Brands Innovations Inc. and The Sherwin Williams Company, and current board roles at BlueScope Steel Limited, O-I Glass Inc. and W.C. Bradley Co., which the chair says will further strengthen Diploma’s board and support its strategic positioning.

Her appointment deepens the board’s expertise in US industrial, building materials and consumer products sectors, potentially enhancing Diploma’s oversight of growth opportunities in those markets. The move signals a continued focus on governance and strategic board composition as the group seeks to bolster its capabilities and align leadership experience with its international growth ambitions.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6550.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma CEO Sells 30,000 Shares in Regulatory Disclosure

Diploma PLC has disclosed that its Chief Executive Officer, Johnny Thomson, sold 30,000 ordinary shares in the company at a price of £56.68 per share on 16 January 2026, in a transaction carried out on the London Stock Exchange. Following the sale, Thomson retains a beneficial holding of 208,500 ordinary shares, and the company framed the disclosure as a regulatory notification under UK Market Abuse Regulation, providing transparency for investors and signalling that the sale is a routine PDMR dealing rather than an undisclosed strategic move.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6400.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma Non-Executive Directors Increase Personal Shareholdings

Diploma PLC reported that non-executive directors Ian El-Mokadem and Katie Bickerstaffe have increased their personal holdings in the company’s shares following market purchases on 14 January 2026. El-Mokadem acquired 500 ordinary shares at £56.15 each via an investment account in which he and his spouse are beneficiaries, lifting their combined holding to 1,000 shares, while Bickerstaffe bought 352 shares at £56.45, taking her total stake to 1,869 shares; the director dealing disclosures, made under UK Market Abuse Regulation, signal a modest vote of confidence in the group’s prospects and ensure continued transparency for shareholders around board members’ equity interests.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6400.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma Faces Shareholder Pushback on Pre-Emption Powers at AGM

Diploma PLC reported that shareholders approved all resolutions at its annual general meeting except a proposal to further disapply pre-emption rights for acquisitions or specified capital investments, which failed to reach the required 75% supermajority. While the general disapplication of pre-emption rights scraped through with a relatively high level of opposition, the board said it will engage with those investors who voted against the two capital-related resolutions and will provide an update within six months, underscoring sensitivities around potential dilution and capital-raising flexibility despite otherwise strong support for the board, dividend, auditor, and share buyback authority.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6400.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma posts strong Q1 growth and steps up acquisition drive

Diploma PLC reported a very strong start to its 2026 financial year, with 14% organic revenue growth in the first quarter to 31 December 2025, underpinned by momentum in both its existing operations and its acquisition strategy. The group completed four acquisitions in the quarter worth around £75m, including Swift Aerospace, Hydraulic Seals Australia, WDS and Spring Solutions, extending its presence in aerospace fasteners, aftermarket seals, OEM machining capabilities and UK/European defence markets. Across the last two quarters Diploma has executed eight deals totalling about £130m, expected to contribute approximately £20m of annualised operating profit, and now assumes 3% net acquisition-led growth for FY26, up from 2%, while maintaining guidance for 6% organic revenue growth and an operating margin of about 22.5%, with growth heavily weighted to the first half.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6600.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma posts strong Q1 with 14% organic growth and ramps up acquisitions

Diploma PLC reported a very strong start to its 2026 financial year, delivering 14% organic revenue growth in the first quarter and maintaining guidance for full-year organic revenue growth of 6% and an operating margin of about 22.5%. The group completed four acquisitions in the quarter for approximately £75m, extending its presence in aerospace fasteners, aftermarket hydraulic seals, OEM machining capabilities and UK/European defence, contributing to a total of eight deals worth around £130m over the last two quarters with expected annualised operating profit of about £20m. Management also increased net acquisition growth guidance to 3% from 2%, underlining strong deal momentum and a healthy pipeline that reinforces Diploma’s strategy of compounding growth through bolt-on acquisitions in attractive end markets.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6600.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma CFO Increases Stake and Receives New Long-Term Incentive Award

Diploma PLC has disclosed that its Chief Financial Officer, Wilson Ng, has acquired 410 ordinary shares at £53.69 each, taking his total holding to 5,397 shares, using half of his FY2025 annual bonus after tax in line with the company’s shareholding policy. The company’s remuneration committee has also granted Ng a long‑term incentive award of up to 12,289 ordinary shares at a reference price of £53.40 under its 2020 Performance Share Plan, with vesting contingent on performance conditions over three years to September 2028, underscoring the group’s continued emphasis on performance-linked executive compensation and alignment with shareholder value.

The most recent analyst rating on (GB:DPLM) stock is a Hold with a £5724.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.