MSC Industrial (MSM) AI Stock Analysis

• Market Cap: $4.99B
• Dividend Yield: 3.79%
• Average Volume (3M): 584.07K
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.88
• Revenue Growth: -4.11%
• EPS Growth: -31.26%
• Country: US
• Employees: 7,191
• Sector: Industrials
• Sector Strength: 86
• Industry: Industrial - Distribution
• EPS (TTM): 1.08
• Shares Outstanding: 55,675,777
• 10 Day Avg. Volume: 1,019,442
• 30 Day Avg. Volume: 584,065
• PEG Ratio: 20.18
• Price to Book (P/B): 3.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.37
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 3.39
• Enterprise Value/Ebitda: 2.84
• 1Y Price Target: $89.50
• Price Target Upside: -0.52% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 72 Outperform
• Price Target: $99.00 ▲(10.04%Upside)

MSC Industrial demonstrates strong financial health and positive cash flow, which are key strengths. However, technical indicators suggest potential overbought conditions, and valuation metrics indicate a possible overvaluation. The mixed earnings call results and recent corporate events provide a balanced view, leading to a moderate overall score.

Positive Factors

Earnings

Fourth-quarter gross margin guidance of 40.9% is better than normal sequentials on price/cost and productivity actions.

Sales Strategy

Sales realignment is helping spur public sector growth and could be a tailwind for core customers and national accounts.

Strategic Improvements

MSM sounded positive on its initial read into its web enhancements, noting more accelerating new customer growth.

Negative Factors

End-Market Challenges

Recent challenges with execution and machinery end market softness have led to a series of negative EPS revisions.

Market Environment

It is tough to get overly excited about MSM shares in the current environment.

Market Visibility

Management commentary was cautious thanks to the lack of visibility beyond the fourth quarter.

MSC Industrial Business Overview & Revenue Model

Company Description

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes metalworking and maintenance, repair, and operations (MRO) products and services in the United States, Canada, Mexico, and the United Kingdom. Its MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock products, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies. The company offers approximately 1.9 million stock-keeping units through its catalogs and brochures; e-commerce channels, including its Website, mscdirect.com; inventory management solutions; and call-centers and branches. It operates through a distribution network of 28 branch offices, 11 customer fulfilment centers, and seven regional inventory centers. The company serves individual machine shops, Fortune 1000 manufacturing companies, and government agencies, as well as manufacturers of various sizes. MSC Industrial Direct Co., Inc. was founded in 1941 and is headquartered in Melville, New York.

How the Company Makes Money

MSC Industrial makes money primarily through the sale of industrial products and solutions. Its revenue model is based on the distribution of a vast array of metalworking and MRO products to businesses across various sectors. The company generates income through direct sales from its e-commerce platform, customer service centers, and a network of sales professionals. MSC Industrial also offers value-added services like inventory management solutions and technical support, enhancing customer loyalty and securing long-term contracts. Significant partnerships with leading manufacturers and suppliers allow MSC to provide a diverse and high-quality product range, contributing to its competitive advantage and earnings growth.

MSC Industrial Financial Statement Overview

Summary

MSC Industrial maintains a strong financial position with healthy profitability and cash flow metrics. Despite a recent decline in revenue and net income, the company continues to demonstrate efficient cost management and solid cash generation. The balance sheet reflects moderate leverage and strong equity financing. Continued focus on revenue growth and operational efficiency will be key to sustaining financial health.

Income Statement

MSC Industrial shows strong gross profit margins, indicating effective cost management. However, there is a decline in revenue and net income on a TTM basis, reflecting potential challenges in maintaining growth. Net profit margin and EBITDA margin remain healthy, but the dip in EBIT margin suggests rising operational costs.

Balance Sheet

The company's debt-to-equity ratio is moderate, indicating a balanced leverage position. The equity ratio is strong, reflecting a solid foundation of equity financing. However, there is a slight decrease in stockholders' equity, signaling potential concerns over reinvestment or return to shareholders.

Cash Flow

The company maintains robust free cash flow, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is favorable, indicating efficient conversion of income to cash. The free cash flow growth rate is slightly negative on a TTM basis, but overall cash flow management remains strong.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	3.75B	3.82B	4.01B	3.69B	3.24B	3.19B
Gross Profit	1.53B	1.57B	1.64B	1.56B	1.33B	1.34B
EBITDA	404.70M	451.03M	553.43M	555.87M	389.60M	442.31M
Net Income	213.33M	258.59M	343.23M	339.79M	216.91M	251.12M
Balance Sheet
Total Assets	2.46B	2.46B	2.54B	2.73B	2.46B	2.38B
Cash, Cash Equivalents and Short-Term Investments	41.28M	29.59M	50.05M	43.54M	40.54M	125.21M
Total Debt	589.65M	568.17M	521.42M	860.77M	836.40M	675.46M
Total Liabilities	1.10B	1.06B	1.05B	1.37B	1.30B	1.06B
Stockholders Equity	1.36B	1.39B	1.48B	1.35B	1.15B	1.31B
Cash Flow
Free Cash Flow	301.54M	311.29M	607.09M	184.81M	170.72M	349.75M
Operating Cash Flow	407.12M	410.70M	699.58M	246.18M	224.46M	396.74M
Investing Cash Flow	-120.49M	-123.40M	-112.67M	-94.49M	-75.75M	-49.28M
Financing Cash Flow	-266.17M	-307.35M	-580.40M	-148.14M	-233.75M	-254.62M

MSC Industrial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 89.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 89.97 is above the 20-day moving average (MA) of 83.46, above the 50-day MA of 80.70, and above the 200-day MA of 79.67, indicating a bullish trend. The MACD of 2.22 indicates Negative momentum. The RSI at 72.21 is Negative, neither overbought nor oversold. The STOCH value of 91.80 is Negative, 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
FAST	77 Outperform	$48.96B	42.58	32.35%	4.12%	3.08%	-0.76%
AIT	75 Outperform	$9.34B	24.59	22.23%	0.75%	0.50%	4.48%
GIC	75 Outperform	$1.08B	17.68	22.15%	3.70%	-0.79%	-13.64%
WCC	73 Outperform	$9.44B	14.63	14.38%	0.94%	-1.80%	9.55%
MSM	72 Outperform	$4.99B	25.28	14.34%	3.79%	-4.11%	-31.26%
GWW	72 Outperform	$49.73B	26.44	57.19%	0.87%	3.71%	7.23%
Sector *	68 Neutral	$2.52B	13.38	7.40%	4.65%	-0.87%	8.24%

MSC Industrial Corporate Events

MSC Industrial Declares Cash Dividend for Shareholders

On June 25, 2025, MSC Industrial Supply Co. announced that its Board of Directors declared a cash dividend of $0.85 per share, payable on July 23, 2025, to shareholders recorded by July 9, 2025. This dividend declaration reflects the company’s ongoing commitment to returning value to its shareholders and may positively impact investor sentiment and the company’s market positioning.

The most recent analyst rating on (MSM) stock is a Hold with a $85.00 price target. To see the full list of analyst forecasts on MSC Industrial stock, see the MSM Stock Forecast page.

MSC Industrial’s Chief People Officer Resigns

On April 15, 2025, Elizabeth Bledsoe announced her voluntary resignation as Senior Vice President & Chief People Officer of MSC Industrial. Her departure is scheduled for on or around May 7, 2025, which may impact the company’s leadership dynamics.