Diploma (DPLM) AI Stock Analysis

• Market Cap: £6.56B
• Dividend Yield: 0.37%
• Average Volume (3M): 239.87K
• Price to Earnings (P/E): 39.2
• Beta (1Y): 0.99
• Revenue Growth: 15.75%
• EPS Growth: 44.11%
• Country: UK
• Employees: 3,597
• Sector: Industrials
• Sector Strength: 91
• Industry: Industrial - Distribution
• EPS (TTM): 0.80
• Shares Outstanding: 134,176,210
• 10 Day Avg. Volume: 250,067
• 30 Day Avg. Volume: 239,872
• PEG Ratio: 4.94
• Price to Book (P/B): 7.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.05
• 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: £5,123.75
• Price Target Upside: 4.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: 5,386.00p ▲(9.83%Upside)

Diploma's overall stock score is driven by strong financial performance and positive corporate events. However, the high P/E ratio and technical indicators suggest caution due to overvaluation and overbought conditions.

Positive Factors

Financial Performance

Diploma has delivered a strong 1H, with revenue +14% (organic +9%) with adj. operating profit +25% to £156.9m (margin 21.5%).

Guidance Upgrade

The group has positive momentum into 2H across all three sectors, and is upgrading its FY25E guidance with organic growth of 8% (from 6%) and operating margin of 22% (from c.21%).

Investor Perception

Management updated on post-roadshow feedback, highlighting a notable shift in investor perception from 'just a distributor' to a quality organic growth company.

Negative Factors

Deal Progression

Deals have not progressed beyond due diligence for various reasons – sometimes price, sometimes management quality or inconsistencies in numbers, or over-reliance on one supplier.

Share Price Performance

The stock has experienced a weak recent share price performance, dropping 16% since President Trump's second inauguration.

Diploma Business Overview & Revenue Model

Company Description

Diploma PLC is an international group of businesses focused on supplying specialized products and services across three core sectors: Life Sciences, Seals, and Controls. The company operates globally, delivering high-quality and technically demanding solutions to its customers, primarily in the healthcare, industrial, and electronics sectors.

How the Company Makes Money

Diploma PLC generates revenue through the distribution and sale of specialized products and services across its three key sectors. In the Life Sciences sector, the company provides consumables, instruments, and related services for the healthcare and environmental industries. The Seals sector offers a wide range of sealing products and related services to industrial customers, while the Controls sector supplies wiring, connectors, fasteners, and control devices for various applications. Diploma's earnings are bolstered by strong supplier relationships, a diverse customer base, and strategic acquisitions that enhance its product and service offerings.

Diploma Financial Statement Overview

Summary

Diploma exhibits robust financial performance with strong revenue growth, improved profitability, solid balance sheet metrics, and consistent cash flow generation. However, there remains room for operational efficiency improvements.

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

Diploma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4904.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 4904 is above the 20-day moving average (MA) of 4852.20, above the 50-day MA of 4631.52, and above the 200-day MA of 4341.30, indicating a bullish trend. The MACD of 73.94 indicates Positive momentum. The RSI at 61.74 is Neutral, neither overbought nor oversold. The STOCH value of 73.80 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	£2.79B	18.11	10.95%	4.73%	-1.32%	-16.36%
GFTU	72 Outperform	£1.77B	14.93	7.50%	4.29%	-1.59%	-12.46%
DPLM	71 Outperform	£6.56B	39.16	18.41%	0.37%	15.75%	44.11%
LTHP	71 Outperform	£227.75M	―		6.53%	―	―
BRCK	70 Outperform	£199.09M	23.68	3.43%	3.62%	-8.13%	-71.44%
Sector *	67 Neutral	£2.82B	10.41	4.69%	3.53%	2.40%	-24.53%
SHI	48 Neutral	£179.12M	―	-23.81%	―	-5.41%	-11.73%

Diploma Corporate Events

Diploma PLC Announces Change in Voting Rights Structure

Diploma PLC, a UK-based company, has announced a change in its voting rights structure following an acquisition or disposal of voting rights and financial instruments by BlackRock, Inc. As of June 30, 2025, BlackRock’s total voting rights in Diploma PLC have fallen below 5%, marking a decrease from their previous position of just over 5%. This adjustment in voting rights could impact the company’s governance and influence within the industry, potentially affecting stakeholders’ interests.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Announces Change in Major Holdings by BlackRock

Diploma PLC announced a change in major holdings, with BlackRock, Inc. increasing its voting rights to 5.02% as of June 5, 2025. This acquisition of voting rights and financial instruments signifies a notable shift in stakeholder dynamics, potentially impacting the company’s governance and strategic decisions.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Announces Change in Major Holdings

Diploma PLC, a UK-based company, has announced a change in its major holdings as BlackRock, Inc., a leading global investment management corporation, has adjusted its financial instruments related to Diploma PLC. The notification indicates that BlackRock’s voting rights in Diploma PLC have fallen below 5%, signaling a potential shift in stakeholder influence and market dynamics for the company.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Director Increases Shareholding

Diploma PLC announced that Katie Bickerstaffe, a Non-Executive Director, has purchased a total of 96 Ordinary Shares in the company over two days, increasing her total shareholding to 1,517 Ordinary Shares. This transaction was made in compliance with the UK Market Abuse Regulation, reflecting ongoing confidence in the company’s market position and potential future performance.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Reports Strong Half-Year Results and Upgrades Full-Year Guidance

Diploma PLC announced strong half-year results for the period ending March 31, 2025, with a 14% increase in revenue to £728.5 million and a 25% rise in adjusted operating profit to £156.9 million. The company reported robust organic revenue growth of 9%, driven by successful acquisitions and operational leverage, and upgraded its full-year guidance. The diversified portfolio and differentiated business model have positioned Diploma well despite an uncertain environment, with positive momentum expected to continue across all sectors.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Announces Change in Shareholder Voting Rights

Diploma PLC has announced a change in its shareholder structure, with Norges Bank crossing a significant threshold in its voting rights. As of May 15, 2025, Norges Bank holds 2.986480% of the voting rights in Diploma PLC, a slight decrease from its previous position. This adjustment in holdings could have implications for the company’s governance and strategic decisions, reflecting a shift in stakeholder influence.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC Announces Change in Major Holdings by The Capital Group

Diploma PLC has announced a change in its major holdings, with The Capital Group Companies, Inc., a U.S.-based investment management firm, adjusting its voting rights in the company. The Capital Group, through its subsidiaries, now holds 12.955690% of voting rights in Diploma PLC, a slight decrease from the previous 13.002149%. This adjustment reflects the ongoing management of investment portfolios by The Capital Group, which does not hold shares for its own account but manages them for various investment clients. This change in holdings may influence the strategic decisions and market perception of Diploma PLC, impacting its operations and stakeholder interests.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Diploma PLC’s Shareholder Structure Shifts with BlackRock’s Acquisition

Diploma PLC has announced a significant change in its shareholder structure, with BlackRock, Inc. acquiring a 5% stake in the company. This acquisition marks a notable shift in the company’s ownership dynamics, potentially impacting its strategic direction and market positioning. The increase in BlackRock’s holdings reflects a growing interest in Diploma’s operations, possibly influencing future stakeholder decisions and company policies.

Diploma PLC Sees Increased Stake by Capital Group

Diploma PLC, a UK-based company, has announced a change in the voting rights held by The Capital Group Companies, Inc. The Capital Group, a major investment management firm based in Los Angeles, has increased its voting rights in Diploma PLC from 12.863009% to 13.002149%, indicating a slight increase in its influence over the company. This adjustment in voting rights reflects The Capital Group’s strategic investment decisions and could impact Diploma’s governance and future strategic directions.