One-glance verdict
Overvalued
$36.95 our estimate vs market $166.56
Wall Street consensus: $212.00 (473.7% higher than our fair-value estimate)
351% above our estimate, beyond the bull case
Fundamentals snapshot
Ducommun Incorporated
DCO · NYQ · Industrials · Aerospace & Defense
Current price
$166.56
52-week range
$84.76 - $210.39
Market cap
$2.52B
Balance sheet
Watch
5.82x Adequate
Net debt $291.73M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 4.7% last year.
- Reward Free cash flow was positive in 8/10 years.
- Risk Net debt grew 27.0% over 3 years.
- Risk Insider ownership is only 4.4% (peer median: 14.5%).
What this company does
Ducommun Incorporated
Ducommun Incorporated builds highly specialized electronic and structural parts for the aerospace and defense industry, essentially supplying the "nervous system" and "skeleton" for aircraft, helicopters, and space vehicles. The company earns its money by selling these complex components for both military and commercial programs. This means its success is closely tied to government defense spending and the airline industry's demand for new planes.
How the company got here
Ducommun is California's oldest company, starting in 1849 as a general store for gold rush miners run by a Swiss watchmaker. [4, 6] It evolved into a hardware and metals supplier that provided materials to early aviation pioneers like Douglas and Lockheed. [1, 4] After World War II, the company grew alongside the aerospace industry, supplying parts for military aircraft and space programs. [4] It later sold off its original metals distribution business to focus entirely on manufacturing high-tech components for the aerospace and defense industry. [4, 6]
What it actually does
Ducommun doesn't sell products directly to consumers; instead, it's a behind-the-scenes manufacturing partner for major aerospace and defense companies like Boeing and Lockheed Martin. [3, 11] It builds highly specialized, custom parts that go into commercial airplanes, military fighter jets, helicopters, and missile systems. [6] Think of them as a high-end workshop that creates the critical electronic guts and structural skeletons for complex machines that fly. These are often 'high-cost-of-failure' applications, meaning the parts they make absolutely cannot fail.
Electronic Systems
This is the larger of the company's two divisions, and it builds the complex electronic and electromechanical hardware for aircraft and defense systems. [8] This includes things like the wiring harnesses and cable systems that act as the aircraft's nervous system, printed circuit boards that are the brains for various functions, and integrated racks that hold avionics (the electronic systems used on aircraft). [9, 15] Major defense contractors pay Ducommun to build these reliable electronic components for everything from missile defense systems to military jets. [10, 11]
Structural Systems
This part of the business manufactures the large, physical body parts and support structures for aircraft. [1, 14] Using advanced techniques, they shape and assemble metals like aluminum and titanium, as well as composite materials, into complex, curved components. [2] These parts become things you would recognize on a plane, such as sections of the fuselage (the main body of the aircraft), wing spoilers, and helicopter rotor blades. [2] Aircraft manufacturers hire Ducommun to build these essential structural pieces for both commercial airliners and military aircraft. [9]
What management is betting on now
The company's leadership is focused on a long-term plan to grow its defense, space, and electronics business, seeing these as high-growth areas. [3, 23] They are also working to improve efficiency by consolidating facilities and are actively looking for smaller companies to acquire that fit into their strategy. [23] A key part of their plan involves increasing the amount of business they do in the aftermarket (providing spare parts and services after the initial sale). [20] Management has been operating under a plan called 'VISION 2027' and is expected to announce a new five-year roadmap called 'VISION 2032'. [24]
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$14.57M
FY2025 Q1
$-4.04M
FY2025 Q2
$18.14M
FY2025 Q3
$16.01M
FY2025 Q4
$-78.75M
FY2026 Q2
$8.30M
FY2026 Q3
$29.97M
Revenue
$224.49M
Net income
$20.40M
Diluted EPS
1.31
Operating cash flow
$33.55M
Free cash flow
$29.97M
Fetching…
Sources
Revenue
$209.02M
Net income
$9.92M
Diluted EPS
0.64
Operating cash flow
$11.24M
Free cash flow
$8.30M
Fetching…
Sources
Revenue
$217.13M
Net income
$9.32M
Diluted EPS
0.60
Operating cash flow
$-74.69M
Free cash flow
$-78.75M
Fetching…
Sources
Revenue
$212.56M
Net income
$-64.45M
Diluted EPS
-4.30
Operating cash flow
$18.10M
Free cash flow
$16.01M
Fetching…
Sources
Revenue
$202.26M
Net income
$12.55M
Diluted EPS
0.82
Operating cash flow
$22.41M
Free cash flow
$18.14M
Fetching…
Sources
Revenue
$194.11M
Net income
$10.51M
Diluted EPS
0.69
Operating cash flow
$771.00K
Free cash flow
$-4.04M
Fetching…
Sources
Revenue
$197.18M
Net income
$6.58M
Diluted EPS
0.44
Operating cash flow
$18.42M
Free cash flow
$14.57M
Fetching…
Sources
Is it cheap or expensive?
Fair value $36.95 vs current price $166.56
Wall Street consensus is the average analyst price target: $212.00 (473.7% higher than our fair-value estimate).
Our most-likely fair value is $36.95 a share — about 77.8% below today's price of $166.56, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $291.7M. Interest coverage 5.8x.
Net debt
$291.73M
Interest coverage
5.82x
Ducommun Incorporated's profit covers its interest bill about 5.8 times over. which is weaker than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
DCO
BASELINE
Ducommun Incorporated
Total debt $334.79M Interest coverage 5.82x This is the baseline the peer rows are being compared against.
Total debt $2.54B Interest coverage 7.85x +35% vs DCO Carries about 1.3x more debt cushion than DCO.
Total debt $1.38B Interest coverage 10.48x +80% vs DCO Carries about 1.8x more debt cushion than DCO.
Total debt $1.12B Interest coverage 37.54x +545% vs DCO Carries about 6.4x more debt cushion than DCO.
What you should know
The case for and against DCO
2 Rewards
3 Risks
Rewards
-
Revenue grew 4.7% last year.
-
Free cash flow was positive in 8/10 years.
Risks
-
Net debt grew 27.0% over 3 years.
-
Insider ownership is only 4.4% (peer median: 14.5%).
-
Return on equity was -3.0% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
31.06x
P/B
3.64x
P/S
2.91x
EV/EBITDA
21.92x
PEG ratio
1.31x
Profitability
How much profit each dollar creates
Gross margin
27.4%
Operating margin
12.6%
Net margin
-2.5%
ROE
-3.0%
ROA
5.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.48x
Current ratio
3.36x
Quick ratio
2.28x
Total debt
$334.79M
Total cash
$43.07M
Growth
How the business has been compounding
Revenue TTM
$863.21M
Revenue 5Y CAGR
6.3%
EPS TTM
-1.25
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-11.80M
Free CF TTM
$-48.64M
FCF margin
-5.6%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2011-02-16