One-glance verdict
Overvalued
$45.22 our estimate vs market $154.78
Wall Street consensus: $158.50 (250.5% higher than our fair-value estimate)
242% above our estimate, beyond the bull case
Fundamentals snapshot
DXP Enterprises, Inc.
DXPE · NMS · Industrials · Industrial Distribution
Current price
$154.78
52-week range
$84.04 - $183.91
Market cap
$2.40B
Balance sheet
Stretched
2.92x Stretched
Net debt $688.63M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.2% last year.
- Reward Returns 18.4% on equity, ahead of 50% of its peers.
- Risk Stock trades 93.7% above its 5-year average P/E.
- Risk Net debt grew 40.9% over 3 years.
What this company does
DXP Enterprises, Inc.
DXP Enterprises is like a specialized hardware store and repair shop for big industrial clients like factories and oil companies. The company makes its money selling essential replacement parts and building custom pump systems needed to keep machinery running around the clock. This is important because DXP provides the critical components and services that prevent costly operational shutdowns for its customers.
How the company got here
DXP Enterprises started in 1908 as the Southern Engine and Pump Company in Houston, Texas, initially helping farmers with irrigation. Over the decades, it grew by expanding its services to the oil and gas industry and other industrial businesses. A key turning point was in the 1990s when the company went public and adopted the DXP Enterprises name, shifting its focus to a broader industrial distribution and services model. Much of its growth has come from acquiring smaller companies, which has allowed it to add new products, expertise, and locations across North America.
What it actually does
Think of DXP Enterprises as a one-stop shop for industrial businesses that need to keep their machinery and operations running smoothly. The company doesn't sell products to everyday consumers, but instead provides a huge range of parts, equipment, and services to other companies in sectors like manufacturing, energy, and water treatment. This includes everything from pumps and bearings to safety gear and custom-engineered systems. Beyond just selling parts, DXP also offers expertise and services to help its customers manage their inventory (the collection of goods a business has on hand) and repair critical equipment.
Service Centers
This is DXP's largest business segment, acting as the local, hands-on part of the company. These centers are like specialized hardware stores for industrial customers, offering a vast range of MRO products (Maintenance, Repair, and Operating – think of all the small parts and supplies needed to keep a factory running). Customers like manufacturing plants or chemical facilities pay DXP for these products, which can be anything from rotating equipment and bearings to safety supplies. This segment is the biggest contributor to the company's revenue (the total money earned from sales) and focuses on getting customers the parts they need quickly, often on the same day.
Innovative Pumping Solutions
This segment is all about designing, building, and servicing specialized pump systems for big industrial jobs. Instead of just selling a standard pump off the shelf, this group creates custom-built packages tailored to a customer's specific needs, like those for water treatment facilities or oil and gas operations. Customers pay for these highly engineered systems, as well as for repairs and remanufacturing of existing equipment. While not the largest part of the company, this segment is important because it provides higher-value, specialized solutions that set DXP apart from a simple parts seller.
Supply Chain Services
This part of the business helps customers manage the complicated process of buying and storing all the parts they need. DXP essentially takes over the customer's storeroom, managing their inventory and making sure they have the right parts at the right time, which helps the customer save money and become more efficient. Customers pay for this management service, which can involve DXP staff working directly on-site at the customer's facility. This segment helps DXP build deep, long-term relationships with its clients by becoming a critical part of their day-to-day operations.
What management is betting on now
Management's strategy focuses on growth through continued acquisitions, buying smaller companies to expand into new markets and add technical capabilities. They are particularly focused on growing their higher-value businesses, like the custom-built systems in Innovative Pumping Solutions and the deep customer relationships of Supply Chain Services. Another key priority is cross-selling, which means getting a customer who buys from one DXP segment to also buy products or services from the other two. The company is also investing in technology to make its supply chain (the entire process of making and selling goods) more efficient and to help customers digitize their own purchasing processes.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$5.91M
FY2024 Q3
$24.39M
FY2024 Q4
$22.75M
FY2025 Q1
$-16.94M
FY2025 Q2
$8.30M
FY2025 Q3
$28.15M
FY2025 Q4
$34.47M
FY2026 Q1
$26.27M
Revenue
$521.66M
Net income
$19.98M
Diluted EPS
1.22
Operating cash flow
$29.57M
Free cash flow
$26.27M
Fetching…
Sources
Revenue
$527.39M
Net income
$22.84M
Diluted EPS
1.38
Operating cash flow
$37.76M
Free cash flow
$34.47M
Fetching…
Sources
Revenue
$513.72M
Net income
$21.63M
Diluted EPS
1.31
Operating cash flow
$34.89M
Free cash flow
$28.15M
Fetching…
Sources
Revenue
$498.68M
Net income
$23.61M
Diluted EPS
1.43
Operating cash flow
$18.65M
Free cash flow
$8.30M
Fetching…
Sources
Revenue
$476.57M
Net income
$20.59M
Diluted EPS
1.25
Operating cash flow
$2.97M
Free cash flow
$-16.94M
Fetching…
Sources
Revenue
$470.91M
Net income
$21.36M
Diluted EPS
1.28
Operating cash flow
$32.14M
Free cash flow
$22.75M
Fetching…
Sources
Revenue
$472.94M
Net income
$21.10M
Diluted EPS
1.27
Operating cash flow
$28.34M
Free cash flow
$24.39M
Fetching…
Sources
Revenue
$445.56M
Net income
$16.69M
Diluted EPS
1.00
Operating cash flow
$14.73M
Free cash flow
$5.91M
Fetching…
Sources
Is it cheap or expensive?
Fair value $45.22 vs current price $154.78
Wall Street consensus is the average analyst price target: $158.50 (250.5% higher than our fair-value estimate).
Our most-likely fair value is $45.22 a share — about 70.8% below today's price of $154.78, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $688.6M. Interest coverage 2.9x.
Net debt
$688.63M
Interest coverage
2.92x
DXP Enterprises, Inc.'s profit covers its interest bill about 2.9 times over.
Stretched
Worse cushion
Baseline
Better cushion
DXPE
BASELINE
DXP Enterprises, Inc.
Total debt $902.01M Interest coverage 2.92x This is the baseline the peer rows are being compared against.
Total debt $365.30M Interest coverage 27.37x +837% vs DXPE Carries about 9.4x more debt cushion than DXPE.
Total debt $555.42M Interest coverage 12.99x +345% vs DXPE Carries about 4.4x more debt cushion than DXPE.
Total debt $849.41M Interest coverage 1.41x -52% vs DXPE Carries about 2.1x less debt cushion than DXPE.
Total debt $99.20M Interest coverage 976.00x +33,302% vs DXPE Carries about 334.0x more debt cushion than DXPE.
What you should know
The case for and against DXPE
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.2% last year.
-
Returns 18.4% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 93.7% above its 5-year average P/E.
-
Net debt grew 40.9% over 3 years.
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)
28.99x
Forward P/E
20.61x
P/B
4.69x
P/S
1.16x
EV/EBITDA
13.84x
PEG ratio
0.55x
Profitability
How much profit each dollar creates
Gross margin
31.7%
Operating margin
8.3%
Net margin
4.3%
ROE
18.4%
ROA
7.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.76x
Current ratio
2.98x
Quick ratio
2.42x
Total debt
$902.01M
Total cash
$213.38M
Growth
How the business has been compounding
Revenue TTM
$2.06B
Revenue 5Y CAGR
16.0%
EPS TTM
5.34
EPS 5Y CAGR
29.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$120.86M
Free CF TTM
$53.98M
FCF margin
2.6%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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