DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. demonstrated a strong financial performance in Q2/25, with adjusted EBITDA increasing by 7.5% year-over-year to reach $48.6 million, surpassing both internal estimates and consensus expectations. Additionally, revenue grew by 14.3% year-over-year to $502.4 million, also exceeding projections from analysts, indicating robust demand across its operating segments. The company's strategic transformation efforts, particularly in the Lawson segment, have begun to yield positive organic revenue growth, further contributing to a favorable outlook for the business.

Distribution Solutions Group Inc. has experienced a decline in revenue primarily driven by its TestEquity segment, which, constituting 39% of total revenue, reported a slight decrease of 1.3% year-over-year attributable to ongoing softer sales trends and customer uncertainty regarding the economy and tariff policies. Additionally, the Lawson Products segment, accounting for 25% of total revenue, also faced a decrease of 1.0% year-over-year, mainly due to reduced sales volume in the military market resulting from tighter government spending. These declines have exerted pressure on the company’s adjusted EBITDA margin, further compounding the negative outlook for the stock amid increased operational costs and uncertain market conditions.