Distribution Solutions Group Inc. Common Stock (DSGR)
CyclicalFairStock Score: 39/100 — MIXED
Key Financials
| Current Price | $26.96 |
| Market Cap | $1.3B |
| P/E Ratio | 224.67 |
| ROE | 0.85% |
| Dividend Yield | —% |
| Sector | Industrials |
Strengths
- Generates $57 million in annual free cash flow (4.5% yield on market cap)
Concerns
- Trades significantly above Graham Number ($8) with negative 263% margin of safety—limited downside protection
- Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
- Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk
- No meaningful dividend despite modest growth—total return depends entirely on multiple expansion
AI Analysis
Distribution Solutions Group Inc. Common Stock is a micro-cap industrials company valued at $1.3 billion. Revenue stands at $2.0 billion, though the company is currently unprofitable. From a quality standpoint, Distribution shows distressed Altman Z-Score of 1.3 warrants caution and modest 1% ROE. On valuation, the stock is commanding a steep 151.9x multiple, with trades far above its Graham Number ($8) with no margin of safety. Growth dynamics show revenue growing at 0.2% and profit growth of 75.4%. Our composite FairStock Score of 39/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.
Bull Case
Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $57 million in annual free cash flow (4.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.
Bear Case
At 152x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.
Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer