DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc demonstrated robust financial performance in Q2/25, with adjusted EBITDA increasing by 7.5% year-over-year to $48.6 million, surpassing both internal estimates and consensus expectations. The company's revenue also saw a significant boost, rising 14.3% year-over-year to $502.4 million, exceeding projections and reflecting strong growth across its operating segments, particularly driven by the Source Atlantic acquisition. Furthermore, improved working capital management led to enhanced operating cash flow, while the legacy Canada Branch business achieved a commendable organic revenue growth of 6.5% year-over-year.

Distribution Solutions Group Inc. has experienced a decline in adjusted EBITDA, which fell by 1.3% year-over-year to $48.5 million, underperforming both internal estimates and market consensus. The TestEquity segment, responsible for 39% of total revenue, has also reported a slight decrease in revenue by 1.3% year-over-year, attributed to ongoing weaker sales trends amidst economic uncertainty and tariff policy concerns. Furthermore, the Lawson Products segment, constituting 25% of total revenue, has shown a similar decline due to reduced military market sales, compounded by lower-margin revenue shifts in TestEquity and competitive pricing pressures impacting overall EBITDA margins.