One-glance verdict
Overvalued
$38.35 our estimate vs market $166.19
Wall Street consensus: $158.50 (313.3% higher than our fair-value estimate)
333% above our estimate, beyond the bull case
Fundamentals snapshot
DXP Enterprises, Inc.
DXPE · NMS · Industrials · Industrial Distribution
Current price
$166.19
52-week range
$75.58 - $183.91
Market cap
$2.58B
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 108.0% 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 giant, specialized hardware store for other businesses, selling the essential parts and equipment they need for maintenance, repair, and operations. Most of its money comes from selling these products through its Service Centers to industries like oil and gas and manufacturing, but it also offers services to help companies manage their supply chain (the entire process of getting needed goods from supplier to factory). Because DXP's products are crucial for keeping factories running, its sales can be a good signal for the overall health of the industrial economy.
How the company got here
DXP Enterprises began in 1908 as the Southern Engine and Pump Company in Houston, Texas, initially providing water pumps to local farmers. Over the decades, it expanded to serve the oil and gas and manufacturing industries. A key turning point was in 1996 when the company went public and changed its name to DXP Enterprises, Inc., reflecting its broader business scope. The company has since grown significantly through numerous acquisitions (buying other companies) to become a major industrial distributor.
What it actually does
Think of DXP Enterprises as a giant, expert hardware store and solutions provider for big industries, not for everyday consumers. They supply businesses like factories, chemical plants, and energy companies with the essential parts, equipment, and services needed to keep their operations running smoothly. This includes everything from pumps and bearings to safety gear and managing a customer's entire spare parts inventory. Essentially, DXP helps its industrial customers maintain their machinery, repair what's broken, and operate efficiently.
Service Centers
This is DXP's largest business segment and acts as the company's frontline. These are local branches that distribute a huge variety of MRO (Maintenance, Repair, and Operating) products, which are all the small and large parts a factory or plant needs to keep running day-to-day. Customers in industries like manufacturing, oil and gas, and food and beverage pay DXP for these essential items, such as bearings, hoses, and safety equipment. This segment is the biggest part of the company, providing a steady stream of revenue from repeat customers who need to constantly replenish their supplies.
Innovative Pumping Solutions
This part of the business is more specialized and technical. Instead of just selling individual parts, this segment designs, builds, and assembles custom pumping systems for specific customer needs, like for water treatment plants or oil pipelines. They also repair and remanufacture existing pumps. Customers pay for these highly engineered, often large-scale, solutions to move fluids as part of their industrial processes. While smaller than the Service Centers, this is a fast-growing and important piece of DXP's business because it involves more custom, high-value work.
Supply Chain Services
This segment acts like an efficiency expert for a customer's spare parts department. Instead of a company managing its own storeroom of MRO products, they can hire DXP to do it for them right at their own facility. DXP takes over the whole process: managing inventory (the stock of parts), purchasing new supplies, and making sure the right parts are available when needed, which helps the customer save money and operate more smoothly. This creates a very close relationship with the customer, making them more likely to stick with DXP for the long term.
What management is betting on now
Management's strategy focuses on being more than just a seller of parts, but a provider of technical solutions. They are emphasizing growth in their higher-value businesses, like the custom-built systems from Innovative Pumping Solutions. A major priority is also expanding their Supply Chain Services to get more deeply involved in their customers' operations, making the relationship stickier. Finally, DXP continues to pursue acquisitions (buying smaller, specialized companies) to enter new markets, like water and wastewater treatment, and add new technical capabilities.
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 $38.35 vs current price $166.19
Wall Street consensus is the average analyst price target: $158.50 (313.3% higher than our fair-value estimate).
Our most-likely fair value is $38.35 a share — about 76.9% below today's price of $166.19, 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 $558.73M 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 108.0% 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)
31.12x
Forward P/E
22.13x
P/B
5.03x
P/S
1.25x
EV/EBITDA
14.76x
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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