Diploma (DPLM) AI Stock Analysis

• Market Cap: £7.58B
• Dividend Yield: 1.07%
• Average Volume (3M): 312.85K
• Price to Earnings (P/E): 45.2
• Beta (1Y): 1.07
• Revenue Growth: 15.75%
• EPS Growth: 44.11%
• Country: UK
• Employees: 3,597
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.80
• Shares Outstanding: 134,176,210
• 10 Day Avg. Volume: 285,214
• 30 Day Avg. Volume: 312,846
• PEG Ratio: 8.36
• Price to Book (P/B): 6.69
• Price to Sales (P/S): 4.36
• P/FCF Ratio: 33.31
• 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: £5,568.00
• Price Target Upside: -1.10% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 73 Outperform
• Price Target: 6,071.00p ▲(7.83% Upside)

Diploma PLC demonstrates strong financial performance and positive corporate events, driving a solid stock score. Technical indicators show bullish momentum, though caution is advised due to potential overbought conditions. The high P/E ratio suggests valuation concerns, slightly tempering the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a healthy expansion trajectory, showcasing the company's ability to capture market share and drive sales across its sectors.

Strategic Acquisitions

These acquisitions enhance Diploma's capabilities and market positioning, particularly in Seals and UK In Vitro Diagnostics, supporting long-term growth and diversification.

Cash Flow Management

Strong cash flow generation supports financial stability, enabling reinvestment in growth opportunities and effective management of financial obligations.

Negative Factors

CFO Resignation

Leadership changes can introduce uncertainty and disrupt strategic initiatives, potentially affecting investor confidence and operational continuity.

Moderate Leverage

While manageable, moderate leverage requires careful monitoring to ensure it does not constrain financial flexibility or increase risk during economic downturns.

Operational Efficiency

Improving operational efficiency is crucial for enhancing profitability and competitiveness, necessitating focus on cost management and process optimization.

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.

How the Company Makes Money

Diploma generates revenue primarily through the distribution of specialized products and solutions in its targeted sectors. Key revenue streams include the sale of medical devices and components in the Life Sciences sector, sealing solutions for industrial applications, and precision-engineering products for various manufacturing needs. The company benefits from long-term relationships with suppliers and customers, enabling it to secure favorable pricing and reliable supply chains. Strategic partnerships with leading manufacturers also enhance its product offerings and market reach. Additionally, Diploma's focus on value-added services, such as technical support and tailored solutions, contributes to customer loyalty and repeat business, further bolstering its earnings.

Diploma Financial Statement Overview

Summary

Diploma's financial statements reflect robust growth and profitability, with strong revenue growth and improved margins. The balance sheet is solid with moderate leverage and effective equity utilization. Consistent cash flow generation supports financial stability and future growth opportunities.

Income Statement

Diploma has demonstrated strong revenue growth, with a 13.6% increase from the previous year, indicative of a healthy expansion trajectory. The gross profit margin stands at 46.1%, showing effective cost management. The net profit margin has improved to 9.5%, reflecting increased profitability. However, the EBIT and EBITDA margins, at 15.2% and 21.6% respectively, suggest room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio of 0.62 indicates moderate leverage, which is manageable but should be monitored. A healthy return on equity (ROE) of 14.6% showcases effective use of shareholder funds. The equity ratio is stable at 50.1%, suggesting a balanced capital structure. Overall, the balance sheet is solid, supporting stable financial health.

Cash Flow

Free cash flow has grown by 7.4%, signaling robust cash generation. The operating cash flow to net income ratio is strong at 1.53, indicating high cash conversion efficiency. The free cash flow to net income ratio of 1.38 further underscores solid cash flow management. The cash flow statement highlights the company's ability to reinvest and manage financial obligations effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.09B	1.36B	1.20B	1.01B	787.40M	538.40M
Gross Profit	506.95M	628.90M	261.00M	335.30M	288.40M	194.40M
EBITDA	244.95M	296.10M	254.00M	203.50M	138.40M	99.80M
Net Income	119.50M	129.30M	117.70M	94.70M	69.80M	49.30M
Balance Sheet
Total Assets	1.76B	1.77B	1.59B	1.39B	994.00M	703.30M
Cash, Cash Equivalents and Short-Term Investments	65.40M	55.50M	62.40M	41.70M	24.80M	206.80M
Total Debt	505.70M	552.10M	397.30M	439.70M	254.50M	33.70M
Total Liabilities	808.20M	877.40M	687.30M	721.50M	453.00M	172.60M
Stockholders Equity	944.20M	888.00M	895.60M	662.00M	536.30M	527.00M
Cash Flow
Free Cash Flow	155.30M	178.40M	166.10M	109.60M	109.90M	76.00M
Operating Cash Flow	167.75M	198.10M	189.20M	125.00M	116.10M	85.40M
Investing Cash Flow	-240.50M	-294.80M	-270.90M	-172.20M	-447.70M	-17.70M
Financing Cash Flow	26.90M	90.30M	107.50M	64.70M	139.00M	114.20M

Diploma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5630.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 5630 is above the 20-day moving average (MA) of 5405.00, above the 50-day MA of 5405.40, and above the 200-day MA of 4740.62, indicating a bullish trend. The MACD of 60.63 indicates Negative momentum. The RSI at 66.56 is Neutral, neither overbought nor oversold. The STOCH value of 88.32 is Negative, 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
GFTU	―	£1.89B	14.61	8.33%	3.76%	5.75%	5.86%
DPLM	―	£7.58B	45.25	18.41%	1.07%	15.75%	44.11%
RS1	―	£2.68B	17.40	10.95%	3.96%	-1.32%	-16.36%
LTHP	―	£202.88M	―	―	6.53%	―	―
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BRCK	―	£173.96M	26.47	3.43%	6.18%	7.23%	-59.68%
SHI	―	£108.35M	-1.55	-37.89%	―	-2.08%	-9.83%

Diploma Corporate Events

Diploma PLC CEO Takes on Advisory Role at TDR Capital

Diploma PLC has announced that its Chief Executive Officer, Johnny Thomson, has been appointed to a non-executive advisory role at TDR Capital LLP. He will also join the Strategic Committee of TDR’s portfolio company, Applus+, which may enhance the company’s strategic insights and expand its industry connections.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £6000.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Announces CFO Resignation and Interim Appointment

Diploma PLC has announced the resignation of its Chief Financial Officer, Chris Davies, due to personal behavior that did not align with the company’s leadership standards. His departure is not related to the company’s financial performance, and the guidance for FY25 remains unchanged. Wilson Ng, the Group Financial Controller, has been appointed as the Acting CFO while the company searches for a permanent replacement.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £45.00 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.