DXP Enterprises (NASDAQ:DXPE) Announces Earnings Results

by · The Cerbat Gem

DXP Enterprises (NASDAQ:DXPE – Get Free Report) announced its quarterly earnings results on Thursday. The industrial products company reported $1.26 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $1.38 by ($0.12), Zacks reports. The company had revenue of $521.66 million during the quarter, compared to the consensus estimate of $531.00 million. DXP Enterprises had a net margin of 4.27% and a return on equity of 18.41%.

Here are the key takeaways from DXP Enterprises’ conference call:

  • Q1 results showed strength with sales of $521.7M (+9.5% YoY), gross margin of 32.3% (+79 bps), adjusted EBITDA of $57.8M (11.1%), adjusted EPS of $1.26, and $26.3M of free cash flow.
  • Innovative Pumping Solutions led growth with sales up 37.7% to $111.7M and sturdy backlogs in energy and water that management says provide multi-quarter revenue visibility.
  • Sales accelerated through the quarter after a weak January (daily sales Jan $7.2M → Feb $8.4M → Mar $9.2M; April ~ $9.0M and +15% YoY), signaling improving demand into Q2.
  • SG&A rose by $16.1M to $126.1M (24.2% of sales) due to discrete items—healthcare, legal/audit and other one-time costs—which could pressure near-term margins until they normalize.
  • Balance sheet activity included $844.7M of total debt, a $90.4M decline in cash to $213.4M to fund three acquisitions, higher working capital and $1.8M more interest expense, increasing leverage and near-term financing costs despite ample liquidity.

DXP Enterprises Price Performance

Shares of NASDAQ:DXPE traded up $6.16 on Friday, reaching $156.18. The company’s stock had a trading volume of 202,115 shares, compared to its average volume of 224,695. DXP Enterprises has a 52-week low of $75.58 and a 52-week high of $183.91. The company has a market cap of $2.42 billion, a P/E ratio of 29.19 and a beta of 1.07. The company has a 50-day simple moving average of $147.76 and a 200 day simple moving average of $127.54. The company has a debt-to-equity ratio of 1.64, a quick ratio of 2.94 and a current ratio of 3.34.

Insider Activity at DXP Enterprises

In other DXP Enterprises news, Director Joseph R. Mannes sold 1,500 shares of DXP Enterprises stock in a transaction on Monday, March 9th. The shares were sold at an average price of $137.95, for a total value of $206,925.00. Following the completion of the transaction, the director directly owned 13,964 shares of the company’s stock, valued at $1,926,333.80. This trade represents a 9.70% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. 22.70% of the stock is owned by insiders.

Hedge Funds Weigh In On DXP Enterprises

Large investors have recently made changes to their positions in the company. Triumph Capital Management purchased a new position in shares of DXP Enterprises during the 3rd quarter worth about $395,000. Prelude Capital Management LLC purchased a new position in shares of DXP Enterprises during the 3rd quarter worth about $262,000. Brevan Howard Capital Management LP purchased a new position in shares of DXP Enterprises during the 3rd quarter worth about $256,000. Brooklyn Investment Group boosted its stake in shares of DXP Enterprises by 1,912.4% during the 3rd quarter. Brooklyn Investment Group now owns 3,421 shares of the industrial products company’s stock worth $407,000 after purchasing an additional 3,251 shares during the period. Finally, Sei Investments Co. purchased a new position in shares of DXP Enterprises during the 3rd quarter worth about $245,000. 74.82% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of analysts have issued reports on DXPE shares. Loop Capital set a $154.00 price target on shares of DXP Enterprises in a report on Monday, March 2nd. Zacks Research upgraded shares of DXP Enterprises from a “hold” rating to a “strong-buy” rating in a report on Thursday, March 12th. Finally, Wall Street Zen upgraded shares of DXP Enterprises from a “hold” rating to a “buy” rating in a report on Saturday, March 28th. One analyst has rated the stock with a Strong Buy rating and two have issued a Buy rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Buy” and an average target price of $154.00.

Check Out Our Latest Report on DXPE

About DXP Enterprises

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DXP Enterprises, Inc is a Houston, Texas–based industrial products and services distributor serving customers across North America. The company provides a broad portfolio of maintenance, repair and operations (MRO) supplies, including fluid power components, safety products, mechanical power transmission parts, and instrumentation. DXP’s product offering spans well-recognized private brands as well as equipment and parts from leading global manufacturers, enabling clients in energy, heavy industrial and manufacturing sectors to source critical components from a single supplier.

Through its network of service centers and specialized repair facilities, DXP delivers inventory management programs, turnkey fluid power rebuilds and custom assembly solutions.

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