DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. demonstrated strong financial performance in Q2/25, with revenue increasing 14.3% year-over-year to $502.4 million, surpassing both internal estimates and market consensus. The company's adjusted EBITDA also rose by 7.5% year-over-year to $48.6 million, indicating robust operational efficiency and financial health. Furthermore, the successful integration of the Source Atlantic acquisition significantly contributed to Canada Branch revenue, which surged by 53.3% year-over-year, thereby enhancing the growth trajectory of the company.

Distribution Solutions Group Inc. has shown signs of declining financial health, with Q3/25 adjusted EBITDA dipping by 1.3% year-over-year to $48.5 million, which fell short of both internal estimates and consensus expectations. The TestEquity segment, accounting for 39% of total revenue, also experienced a slight decrease of 1.3% year-over-year, primarily driven by ongoing weak sales in electronic production supplies and test & measurement equipment due to economic uncertainty and tariff policy considerations. Furthermore, the company faced margin pressures in adjusted EBITDA due to investments in Lawson’s sales transformation and a mix shift towards lower-margin products in the TestEquity segment, compounded by decreased sales in the Lawson Products segment resulting from reduced military market activity amidst constrained government spending.