DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. has demonstrated strong financial performance in Q2/25, with adjusted EBITDA rising 7.5% year-over-year to $48.6 million, surpassing both internal and consensus estimates. The company reported a significant revenue increase of 14.3% year-over-year, reaching $502.4 million, which also exceeded expectations, highlighting robust growth across its segments. Furthermore, the Canada Branch experienced impressive growth with a 53.3% year-over-year increase in revenue due to the Source Atlantic acquisition, while the legacy Bolt Supply business achieved organic growth of 6.5% year-over-year, reinforcing a solid operational foundation.

Distribution Solutions Group Inc faces a negative outlook due to declining performance in key segments, with Q3/25 adjusted EBITDA decreasing by 1.3% year-over-year to $48.5 million, slightly below estimates and consensus expectations. The TestEquity segment, which accounts for 39% of total revenue, experienced a 1.3% year-over-year decline, attributed to ongoing lackluster sales trends amid economic uncertainty and tariff policy concerns. Additionally, the Lawson Products segment, representing 25% of total revenue, also faced a decline of 1.0% year-over-year, driven by reduced sales volume in the military market and increased competitive pricing pressures, further impacting overall financial performance and margins.