DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. demonstrated strong financial performance in Q2/25, with adjusted EBITDA rising by 7.5% year-over-year to $48.6 million, surpassing both internal estimates and consensus predictions. Additionally, the company reported a 14.3% increase in revenue, reaching $502.4 million, again exceeding forecasts, which highlights effective strategic execution and operational efficiency. Notably, the Canada Branch's revenue surged by 53.3% year-over-year, primarily driven by the Source Atlantic acquisition, contributing positively to the company's overall growth trajectory.

Distribution Solutions Group Inc. is facing a negative outlook primarily due to declining revenue trends across its key operating segments, particularly TestEquity, which reported a slight year-over-year revenue decrease of 1.3% amid customer uncertainty and pricing pressures. This decline in the TestEquity segment, which represents 39% of total revenue, has contributed to a slight drop in adjusted EBITDA to $48.5 million, which fell short of expectations and reflects broader concerns about the economic environment and continuing investments in sales transformation within the Lawson segment. Additionally, the Lawson Products segment experienced a decrease in revenue of 1.0% due to reduced sales volume linked to government spending cuts, further exacerbating the overall financial challenges faced by the company.