DXP Enterprises Inc (DXPE) stock analysis

P/E above its 5-year median

DXP Enterprises's P/E of 25.8 is above its own 5-year median of 18.7.

P/E above the industry

DXP Enterprises's P/E of 25.8 is above the Wholesale Trade-durable Goods median of 20.3.

EV/EBITDA above its 5-year median

DXP Enterprises's EV/EBITDA of 15.3 is above its 5-year median of 12.4.

P/B above the industry

DXP Enterprises's price-to-book of 4.21 is above the Wholesale Trade-durable Goods median of 2.15.

Trading above fair value

The share price of $154.78 is above our fair value estimate of $109.84.

Margin of safety under 20%

The price is 40.9% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 10.8% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 29.5% a year over the last three fiscal years.

Earnings acceleration

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

Growing faster than the industry

Revenue grew 12.9% 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 improving

Gross margin was 31.6% over the last twelve months, against 31.5% a year earlier.

Return on equity under 15%

Return on equity was 18.6% over the last twelve months and averaged 14.7% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

DXP Enterprises's return on equity of 18.6% is above the Wholesale Trade-durable Goods median of 17.2%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 4.4% over the last twelve months, against a 5-year average of 3.4%.

Net margin below the industry

DXP Enterprises's net margin of 4.4% is below the Wholesale Trade-durable Goods median of 5.0%.

High debt

Debt is 144% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 88.9% five years ago to 144%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 14.4% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.0 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.96 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.56; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

DXP Enterprises 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.