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Diploma
(LSE:DPLM)
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Rating:75Outperform
Price Target:
8,634.00 p
▲(14.81% Upside)
Action:Reiterated
Date:08/06/26
Score is supported primarily by strong financial performance (rapid growth, improving margins, and high free-cash-flow quality) and clear technical uptrend momentum. The main constraint is valuation: a high P/E and modest dividend yield reduce the overall attractiveness despite solid fundamentals.
Positive Factors
Cash generation
Consistently strong free cash flow and a ~63% increase in 2025 indicate durable cash-generation capability. FCF roughly matching earnings (~0.88–0.95x) supports reinvestment, acquisitions, shareholder returns and debt service, underpinning long-term financial flexibility.
Negative Factors
Gross margin volatility
Notable year-to-year gross margin volatility, including an unusually high 2024 level, suggests product-mix or acquisition-driven swings. This weakens margin predictability, complicates forecasting of sustainable operating margins and raises execution risk for long-term profitability assumptions.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistently strong free cash flow and a ~63% increase in 2025 indicate durable cash-generation capability. FCF roughly matching earnings (~0.88–0.95x) supports reinvestment, acquisitions, shareholder returns and debt service, underpinning long-term financial flexibility.
Read all positive factors
Diploma (DPLM) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£9.88B
Dividend Yield0.86%
Average Volume (3M)312.85K
Price to Earnings (P/E)52.3
Beta (1Y)0.90
Revenue Growth13.31%
EPS Growth13.05%
CountryUK
Employees3,390
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)1.41
Shares Outstanding134,317,400
10 Day Avg. Volume285,214
30 Day Avg. Volume312,846
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)7.19
Price to Sales (P/S)4.67
P/FCF Ratio28.09
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£8,142.86Price Target Upside8.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)2.49
Revenue Forecast (FY)£1.82B
Diploma Business Overview & Revenue Model
Company Description
Diploma PLC is a global provider of highly specialized technical products and services, operating across the United Kingdom, Europe, North America, and other international markets. The company structures its diverse operations into three primary b...
Diploma Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.01B | 1.52B | 1.36B | 1.20B | 1.01B | 787.40M |
| Gross Profit | 432.55M | 377.70M | 628.90M | 261.00M | 335.30M | 288.40M |
| EBITDA | 506.45M | 368.60M | 296.10M | 254.00M | 203.50M | 138.40M |
| Net Income | 189.40M | 184.90M | 129.30M | 117.70M | 94.70M | 69.80M |
Balance Sheet | ||||||
| Total Assets | 1.97B | 1.86B | 1.77B | 1.59B | 1.39B | 994.00M |
| Cash, Cash Equivalents and Short-Term Investments | 68.70M | 81.70M | 55.50M | 62.40M | 41.70M | 24.80M |
| Total Debt | 501.40M | 464.90M | 552.10M | 397.30M | 439.70M | 254.50M |
| Total Liabilities | 912.00M | 862.60M | 877.40M | 687.30M | 721.50M | 453.00M |
| Stockholders Equity | 1.05B | 989.70M | 888.00M | 895.60M | 662.00M | 536.30M |
Cash Flow | ||||||
| Free Cash Flow | 268.20M | 253.20M | 178.40M | 166.10M | 109.60M | 109.90M |
| Operating Cash Flow | 283.90M | 267.60M | 198.10M | 189.20M | 125.00M | 116.10M |
| Investing Cash Flow | -147.40M | -31.30M | -294.80M | -270.90M | -172.20M | -447.70M |
| Financing Cash Flow | -132.10M | -212.90M | 90.30M | 107.50M | 64.70M | 139.00M |
Diploma Technical Analysis
Neutral
7520.00
Price Trends
7192.90
Positive
6938.45
Positive
6170.49
Positive
Market Momentum
102.70
Positive
49.87
Neutral
31.32
Neutral
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 7520 is above the 20-day moving average (MA) of 7472.00, above the 50-day MA of 7192.90, and above the 200-day MA of 6170.49, indicating a neutral trend. The MACD of 102.70 indicates Positive momentum. The RSI at 49.87 is Neutral, neither overbought nor oversold. The STOCH value of 31.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:DPLM.
Diploma Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | £9.88B | 52.27 | 18.55% | 0.84% | 13.31% | 13.05% | |
73 Outperform | £212.83M | 1.33 | 8.13% | 6.53% | ― | ― | |
64 Neutral | £3.35B | 21.07 | 11.55% | 3.36% | -0.77% | 6.65% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | £52.67M | -12.21 | -8.17% | ― | 8.98% | 87.44% | |
48 Neutral | £99.14M | -1.93 | -47.73% | ― | -0.75% | 25.17% | |
48 Neutral | £476.79M | -10.07 | -104.92% | ― | 130.19% | ― |
* Industrials Sector Average
GB:DPLM
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Diploma Corporate Events
Regulatory Filings and Compliance
Diploma Directors Increase Personal Stakes in Company Shares
Positive
Jul 20, 2026
Diploma PLC has disclosed a series of share purchases by senior board members, including its Senior Independent Director, Chief Financial Officer and a Non-Executive Director. These transactions modestly increase each director’s personal sta...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Diploma lifts full-year guidance after strong Q3 and US interconnect deal
Positive
Jul 16, 2026
Diploma PLC reported a strong third quarter, with organic revenue up 15% and ongoing momentum from the first half driven by robust performance in its Controls businesses and a slightly improved showing from Seals, while Life Sciences remained resi...
Executive/Board ChangesRegulatory Filings and Compliance
Diploma reshapes Remuneration Committee leadership
Neutral
Jul 3, 2026
Diploma PLC has announced changes to the composition of its Remuneration Committee, reflecting a reshaping of board oversight of executive pay. Jennifer Ward will remain on the committee but step down as Chair on 6 July 2026 due to other commitmen...
Executive/Board Changes
Diploma refreshes board with appointment of senior finance executive
Positive
Jun 1, 2026
Diploma has appointed experienced finance executive Mandy Gradden as an independent non-executive director, effective 1 June 2026, with roles on both the Audit and Nomination Committees. Gradden, a former Ascential chief financial officer and curr...
Regulatory Filings and Compliance
Diploma Senior Independent Director Increases Shareholding in Governance-Driven Trade
Positive
May 21, 2026
Diploma PLC disclosed that its Senior Independent Director, Katie Bickerstaffe, purchased 177 ordinary shares in the company on 20 May 2026 at £67.30 per share, taking her total holding to 2,297 shares. The transaction, conducted on the Londo...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Diploma lifts full-year guidance after strong first half and acquisition-led growth
Positive
May 19, 2026
Diploma reported a strong first-half performance for the six months to 31 March 2026, with revenue up 17% to £851.1m and organic revenue growth accelerating to 15%. Adjusted operating profit rose 33% to £208.9m, lifting the adjusted oper...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.