Distribution Solutions Group Inc. Common Stock (DSGR)

FairStock Score: 39/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and can be bought at a sensible price. Distribution Solutions Group is not that yet. It is a specialty distributor serving MRO, OEM and industrial technology markets, with 4,300 employees and four segments. Revenue has grown: fiscal 2025, ended 2025-12-31, was $2.0B versus $1.8B in fiscal 2024 and $1.6B in fiscal 2023. The company lost $7.3M in fiscal 2024 and $9.0M in fiscal 2023, then earned $8.3M in fiscal 2025. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $557.7M and net income $8.5M, a 1.52% margin. That is improvement, but the profit is wafer-thin. As a Graham investor, I see little margin of safety. At the 2026-10-13 close of $35.07, FairStock calculations show P/E of 184.58, P/B of 2.48, and FCF yield of 0.8%. Its Graham Number is $7.78, implying a -350.77% margin of safety. ROE is 1.37%, ROCE is 2.84%, and debt-to-equity is 1.29; Altman Z-Score of 1.51 suggests balance-sheet caution. The Lynch category is TURNAROUND, because it returned to profit after losses. Turnarounds can work, but they need evidence of durable margin expansion and cash generation. Here, trailing FCF is $13.3M, too small for a $1.6B market value. The stock has run from a 52-week low of $19.02 to $35.07. I would want to see several quarters of higher margins, lower leverage, and stronger free cash flow before calling this a high-quality business.

In plain English: Distribution Solutions Group is a specialty distributor serving industrial, maintenance, repair, and test-equipment markets. It lost money in fiscal 2023 and fiscal 2024 but has recently returned to small profits, although profit margins are very thin and debt is meaningful. At the 2026-10-13 close of $35.07, the price looks expensive compared with its reported profits and net assets.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer