DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc demonstrated strong financial performance in Q2/25, with adjusted EBITDA rising 7.5% year-over-year to $48.6 million, outperforming both internal estimates and market consensus. The company also reported a 14.3% increase in revenue to $502.4 million, significantly exceeding prior projections, driven in part by a notable 53.3% year-over-year revenue growth in its Canada Branch following the Source Atlantic acquisition. Furthermore, improved working capital management contributed to enhanced operating cash flow, while the legacy Canada Branch maintained healthy organic revenue growth of 6.5% year-over-year, highlighting the firm’s resilience and strength across its operating segments.

Distribution Solutions Group Inc. is experiencing challenges leading to a negative outlook, as evidenced by a 1.3% year-over-year decline in adjusted EBITDA for Q3/25, which fell short of both internal estimates and consensus expectations. The TestEquity segment, responsible for a significant portion of total revenue, also recorded a 1.3% decrease in sales due to ongoing weak demand for its electronic production supplies and test equipment amid economic uncertainty and tariff policy concerns. Furthermore, the Lawson Products segment saw a 1.0% decline in revenue primarily attributed to reduced military market sales, compounded by continued investments impacting adjusted EBITDA margins across the business.