DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. is experiencing positive momentum as evidenced by a growing order backlog in early 2026, suggesting a strengthening market position. The Canada Branch reported a significant year-over-year revenue increase of 53.3%, largely attributed to the Source Atlantic acquisition, while the legacy Canada Branch business achieved organic growth of 6.5%. Additionally, the TestEquity segment, generating 40% of total revenue, recorded a 5.7% year-over-year increase due to improved sales in a previously uncertain economic environment, reinforcing a favorable outlook for adjusted EBITDA margins in 2026.

Distribution Solutions Group Inc. has experienced notable declines in adjusted EBITDA, with a -21% year-over-year decrease in Q4/25, resulting in a margin contraction to 7.4%, which fell short of both internal estimates and consensus expectations. Revenue from key segments, including TestEquity and Gexpro Services, did not meet projections, contributing to stagnant full-year adjusted EBITDA of $175.2 million and an overall margin decline of 80 basis points. Additionally, external pressures such as economic headwinds in the Canadian market and competitive pricing challenges further exacerbated the company's margins, indicating potential ongoing financial difficulties.