Distribution Solutions Group, Inc. (DSGR) stock analysis

P/E above its 5-year median

Distribution Solutions's P/E of 146.2 is above its own 5-year median of 144.6.

P/E above the industry

Distribution Solutions's P/E of 146.2 is above the Wholesale Trade-durable Goods median of 20.3.

EV/EBITDA above its 5-year median

Distribution Solutions's EV/EBITDA of 15.0 is above its 5-year median of 14.9.

P/B above the industry

Distribution Solutions's price-to-book of 2.44 is above the Wholesale Trade-durable Goods median of 2.15.

Trading above fair value

The share price of $35.08 is above our fair value estimate of $22.43.

Margin of safety under 20%

The price is 56.4% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 19.8% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -5.0% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 6.6% over the last twelve months; the Wholesale Trade-durable Goods median is 7.5%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 32.5% over the last twelve months, against 33.6% a year earlier.

Return on equity under 15%

Return on equity was 1.7% over the last twelve months and averaged -0.5% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Distribution Solutions's return on equity of 1.7% is below the Wholesale Trade-durable Goods median of 17.2%.

Earnings shrank over 5 years

Net income shrank 11.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 0.5% over the last twelve months, against a 5-year average of -0.2%.

Net margin below the industry

Distribution Solutions's net margin of 0.5% is below the Wholesale Trade-durable Goods median of 5.0%.

High debt

Debt is 114% of shareholders' equity, above the 40% we consider low.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 4.9% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.4 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.47 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.37; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Distribution Solutions has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.