MSC Industrial (MSM) AI Stock Analysis

• Market Cap: $4.84B
• Dividend Yield: 3.94%
• Average Volume (3M): 630.47K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 0.86
• Revenue Growth: -1.35%
• EPS Growth: -22.24%
• Country: US
• Employees: 7,191
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 1.09
• Shares Outstanding: 55,791,580
• 10 Day Avg. Volume: 717,347
• 30 Day Avg. Volume: 630,472
• PEG Ratio: -1.13
• Price to Book (P/B): 3.63
• Price to Sales (P/S): 1.34
• P/FCF Ratio: 15.08
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 1.47
• Enterprise Value/Gross Profit: 3.60
• Enterprise Value/Ebitda: 14.65
• 1Y Price Target: $96.00
• Price Target Upside: 14.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 4.25
• Revenue Forecast (FY): $3.96B

• Rating: 69 Neutral
• Price Target: $95.00 ▲(13.76% Upside)

MSC Industrial's overall stock score reflects a balance of stable financial performance and strategic initiatives against challenges in profitability and market momentum. The company's strong dividend yield and recent corporate actions provide a positive outlook, but operational and market challenges remain significant.

Positive Factors

Cash Generation

Strong free cash flow conversion indicates robust cash generation, providing financial flexibility for investments and shareholder returns.

Strategic Initiatives

Expansion of high-touch solutions like vending and implant programs supports long-term sales growth and customer retention.

Financial Flexibility

Amending the Receivables Purchase Agreement enhances financial flexibility, supporting operational strategy and potential growth initiatives.

Negative Factors

Revenue Decline

Negative revenue growth indicates challenges in market demand or competitive positioning, potentially impacting long-term profitability.

Profit Margin Pressure

Declining gross margins due to cost pressures can erode profitability, affecting the company's ability to invest in growth initiatives.

National Accounts Performance

Decline in national accounts suggests challenges in maintaining large customer relationships, which could impact revenue stability.

MSC Industrial Business Overview & Revenue Model

Company Description

MSC Industrial Direct Co., Inc. (MSM) is a leading distributor of metalworking and maintenance, repair, and operations (MRO) products in North America. The company primarily serves a diverse range of sectors, including manufacturing, construction, and healthcare, by providing a vast selection of industrial supplies, tools, and equipment. MSC offers a comprehensive portfolio of products, including cutting tools, abrasives, fasteners, and safety equipment, along with value-added services such as inventory management and supply chain solutions.

How the Company Makes Money

MSC Industrial generates revenue primarily through the sale of industrial supply products to various sectors. The company's revenue model is built on a combination of direct sales through its catalog and online platform, which provides customers with easy access to a wide range of products. Key revenue streams include sales of metalworking tools, MRO products, and safety equipment. Additionally, MSC offers services like inventory management solutions, which create recurring revenue opportunities. The company has established significant partnerships with leading manufacturers, enabling it to provide high-quality products and maintain competitive pricing, which further contributes to its earnings.

MSC Industrial Financial Statement Overview

Summary

MSC Industrial demonstrates stable gross profit margins and a solid balance sheet with moderate leverage. However, declining revenue and net profit margins indicate challenges in maintaining profitability. Cash flow performance is mixed, with strong free cash flow growth but reduced operating cash flow. Overall, the company shows resilience but faces profitability and growth challenges.

Income Statement

MSC Industrial shows a stable gross profit margin around 41%, indicating consistent cost management. However, the net profit margin decreased from 6.77% to 5.29%, reflecting reduced profitability. Revenue growth is negative at -4.70%, suggesting a decline in sales. The EBIT margin dropped significantly, indicating operational challenges.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.39, showing moderate leverage. Return on equity decreased from 18.58% to 14.36%, indicating reduced efficiency in generating profits from equity. The equity ratio remains stable, reflecting a balanced asset structure.

Cash Flow

Operating cash flow decreased, impacting the operating cash flow to net income ratio, which fell from 0.68 to 0.46. However, free cash flow grew by 26.62%, and the free cash flow to net income ratio improved to 1.0, indicating strong cash generation relative to net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.77B	3.77B	3.82B	4.01B	3.69B	3.24B
Gross Profit	1.54B	1.54B	1.57B	1.64B	1.56B	1.33B
EBITDA	377.82M	377.82M	451.03M	553.43M	555.87M	389.60M
Net Income	199.33M	199.33M	258.59M	343.23M	339.79M	216.91M
Balance Sheet
Total Assets	2.46B	2.46B	2.46B	2.54B	2.73B	2.46B
Cash, Cash Equivalents and Short-Term Investments	56.23M	56.23M	29.59M	50.05M	43.54M	40.54M
Total Debt	538.81M	538.81M	568.17M	521.42M	860.77M	836.40M
Total Liabilities	1.07B	1.07B	1.06B	1.05B	1.37B	1.30B
Stockholders Equity	1.39B	1.39B	1.39B	1.48B	1.35B	1.15B
Cash Flow
Free Cash Flow	240.88M	333.72M	311.29M	607.09M	184.81M	170.72M
Operating Cash Flow	333.72M	333.72M	410.70M	699.58M	246.18M	224.46M
Investing Cash Flow	-63.29M	-63.29M	-123.40M	-112.67M	-94.49M	-75.65M
Financing Cash Flow	-243.57M	-243.57M	-307.35M	-580.40M	-148.14M	-233.85M

MSC Industrial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 83.51
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSM, the sentiment is Positive. The current price of 83.51 is below the 20-day moving average (MA) of 85.42, below the 50-day MA of 86.09, and above the 200-day MA of 83.04, indicating a bullish trend. The MACD of -0.55 indicates Negative momentum. The RSI at 53.61 is Neutral, neither overbought nor oversold. The STOCH value of 63.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSM.

MSC Industrial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIC	77 Outperform	$1.15B	17.07	22.61%	3.47%	0.16%	2.99%
AIT	74 Outperform	$9.87B	25.17	22.10%	0.70%	4.03%	5.93%
GWW	73 Outperform	$48.62B	28.54	48.98%	0.86%	4.83%	-3.60%
FAST	72 Outperform	$48.23B	39.39	32.74%	2.08%	6.92%	5.98%
DXPE	71 Outperform	$1.71B	20.74	19.58%	―	12.76%	36.11%
MSM	69 Neutral	$4.84B	24.32	14.34%	3.94%	-1.35%	-22.24%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

MSC Industrial Corporate Events

MSC Industrial Amends Receivables Purchase Agreement

On December 10, 2025, MSC Industrial Direct Co., Inc. amended its Receivables Purchase Agreement, originally dated December 19, 2022. The amendment extends the termination date to December 8, 2028, increases the maximum commitment by $50 million to $350 million, removes the credit spread adjustment to the interest rate, and updates the definition of the company’s consolidated net leverage ratio. These changes are expected to impact the company’s financial flexibility and operational strategy positively.

MSC Industrial Reports Q4 2025 Financial Results

On October 23, 2025, MSC Industrial Supply Co. reported its fiscal 2025 fourth quarter and full-year financial results, highlighting a 2.7% year-over-year increase in net sales for the fourth quarter, reaching $978.2 million. Despite a 1.3% decrease in full-year net sales, the company achieved a positive cash flow conversion and returned $229 million to shareholders through dividends and share repurchases. The company’s strategic focus on high-touch solutions, core customer engagement, and cost optimization has led to growth in daily sales and earnings per share, positioning it for profitable growth in fiscal 2026.

MSC Industrial Increases Dividend by 2.4%

On October 7, 2025, MSC Industrial Supply Co. announced that its Board of Directors declared a cash dividend of $0.87 per share, marking a 2.4% increase from the previous dividend. This decision reflects the company’s commitment to providing value to its shareholders and may enhance its market positioning by demonstrating financial stability and growth potential.