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Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 43.4GRADE C
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-4.7%
Sector: 8.9%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, DUCOMMUN INC /DE/ (DCO) receives a "Hold" rating with a composite score of 49.4/100, ranked #791 out of 4446 stocks. Key factor scores: Quality 43/100, Value 34/100, Momentum 72/100. This is quantitative analysis only — not investment advice.
DUCOMMUN INC /DE/ (DCO) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does DUCOMMUN INC /DE/ Do?
Ducommun Incorporated provides engineering and manufacturing products and services primarily to the aerospace and defense, industrial, medical, and other industries in the United States. It operates through two segments, Electronic Systems and Structural Systems. The Electronic Systems segment provides cable assemblies and interconnect systems; printed circuit board assemblies; higher-level electronic, electromechanical, and mechanical components and assemblies, as well as lightning diversion systems; and radar enclosures, aircraft avionics racks, shipboard communications and control enclosures, shipboard communications and control enclosures, printed circuit board assemblies, cable assemblies, wire harnesses, interconnect systems, lightning diversion strips, surge suppressors, conformal shields, and other assemblies. It also supplies engineered products, including illuminated pushbutton switches and panels for aviation and test systems; microwave and millimeter switches and filters for radio frequency systems and test instrumentation; and motors and resolvers for motion control. In addition, this segment provides engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components; structural assembly products, such as winglets, engine components, and fuselage structural panels; and metal and composite bonded structures and assemblies comprising aircraft wing spoilers, large fuselage skins, rotor blades on rotary-wing aircraft and components, flight control surfaces, engine components, ammunition handling systems, and magnetic seals. It serves commercial aircraft, military fixed-wing aircraft, military and commercial rotary-wing aircraft, and space programs, as well as industrial, medical, and other end-use markets. The company was founded in 1849 and is headquartered in Santa Ana, California. DUCOMMUN INC /DE/ (DCO) is classified as a small-cap stock in the Industrials sector, specifically within the Aircraft industry. The company is led by CEO Stephen G. Oswald and employs approximately 2,460 people, headquartered in Carson, California. With a market capitalization of $1.9B, DCO is one of the notable companies in the Industrials sector.
DUCOMMUN INC /DE/ (DCO) Stock Rating — Hold (April 2026)
As of April 2026, DUCOMMUN INC /DE/ receives a Hold rating with a composite score of 49.4/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.DCO ranks #791 out of 4,446 stocks in our coverage universe. Within the Industrials sector, DUCOMMUN INC /DE/ ranks #137 of 752 stocks, placing it in the top quartile of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
DCO Stock Price and 52-Week Range
DUCOMMUN INC /DE/ (DCO) currently trades at $139.99. The stock lost $0.60 (0.4%) in the most recent trading session. The 52-week high for DCO is $140.02, which means the stock is currently trading -0.0% from its annual peak. The 52-week low is $51.76, putting the stock 170.5% above its annual trough. Recent trading volume was 184K shares, suggesting relatively thin trading activity.
Is DCO Overvalued or Undervalued? — Valuation Analysis
DUCOMMUN INC /DE/ (DCO) carries a value factor score of 34/100 in the Blank Capital model, signaling premium valuation that prices in significant future growth. The price-to-book ratio stands at 3.04x, versus the sector average of 2.23x. The price-to-sales ratio is 2.49x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, DCO trades at 859.86x EV/EBITDA, versus 5.70x for the sector.
At current multiples, DUCOMMUN INC /DE/ trades at a premium to most Industrials peers. This elevated valuation may be justified if the company can sustain above-average growth rates and profitability, but it also creates downside risk if earnings disappoint expectations.
DUCOMMUN INC /DE/ Profitability — ROE, Margins, and Quality Score
DUCOMMUN INC /DE/ (DCO) earns a quality factor score of 43/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is -4.7%, compared to the Industrials sector average of 8.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at -2.6% versus the sector average of 3.3%.
On a margin basis, DUCOMMUN INC /DE/ reports gross margins of 26.5%, compared to 35.8% for the sector. The operating margin is -3.3% (sector: 6.2%). Net profit margin stands at -3.4%, versus 3.9% for the average Industrials stock. Revenue growth is running at 7.9% on a trailing basis, compared to 6.4% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
DCO Debt, Balance Sheet, and Financial Health
DUCOMMUN INC /DE/ has a debt-to-equity ratio of 45.0%, compared to the Industrials sector average of 70.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 3.50x, indicating strong short-term liquidity. Total debt on the balance sheet is $299M. Cash and equivalents stand at $51M.
DCO has a beta of 0.90, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for DUCOMMUN INC /DE/ is 69/100, reflecting average volatility within the normal range for its sector.
DUCOMMUN INC /DE/ Revenue and Earnings History — Quarterly Trend
In TTM 2026, DUCOMMUN INC /DE/ reported revenue of $810M and earnings per share (EPS) of $-2.27. Net income for the quarter was $-31M. Gross margin was 26.5%. Operating income came in at $-31M.
In FY 2025, DUCOMMUN INC /DE/ reported revenue of $825M and earnings per share (EPS) of $-2.27. Net income for the quarter was $-34M. Gross margin was 26.9%. Revenue grew 4.9% year-over-year compared to FY 2024. Operating income came in at $-32M.
In Q3 2025, DUCOMMUN INC /DE/ reported revenue of $213M and earnings per share (EPS) of $-4.30. Net income for the quarter was $-64M. Gross margin was 26.6%. Revenue grew 5.5% year-over-year compared to Q3 2024. Operating income came in at $-80M.
In Q2 2025, DUCOMMUN INC /DE/ reported revenue of $202M and earnings per share (EPS) of $0.84. Net income for the quarter was $13M. Gross margin was 26.6%. Revenue grew 2.7% year-over-year compared to Q2 2024. Operating income came in at $17M.
Over the past 8 quarters, DUCOMMUN INC /DE/ has demonstrated a growth trajectory, with revenue expanding from $197M to $810M. Investors analyzing DCO stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
DCO Dividend Yield and Income Analysis
DUCOMMUN INC /DE/ (DCO) does not currently pay a dividend. This is common among smaller companies in the Aircraft industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Industrials dividend stocks may want to explore other Industrials stocks or use the stock screener to filter by dividend yield.
DCO Momentum and Technical Analysis Profile
DUCOMMUN INC /DE/ (DCO) has a momentum factor score of 72/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 30/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 35/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
DCO vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing DCO against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full DCO vs S&P 500 (SPY) comparison to assess how DUCOMMUN INC /DE/ stacks up against the broader market across all factor dimensions.
DCO Next Earnings Date
No upcoming earnings date has been announced for DUCOMMUN INC /DE/ (DCO) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy DCO? — Investment Thesis Summary
DUCOMMUN INC /DE/ presents a balanced picture with arguments on both sides. The value score of 34/100 indicates premium valuation. Price momentum is positive at 72/100, suggesting the trend favors buyers. Low volatility (stability score 69/100) reduces downside risk.
In summary, DUCOMMUN INC /DE/ (DCO) earns a Hold rating with a composite score of 49.4/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on DCO stock.
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Institutional Research Dossier
DUCOMMUN INC /DE/ (DCO) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Ducommun Incorporated (DCO) receives a Hold rating, primarily driven by its mixed financial performance and relatively high valuation compared to its sector, despite showing some positive momentum in revenue growth. The company's recent net losses and high EV/EBITDA multiple raise concerns about its profitability and valuation, offsetting the positive aspects of its revenue growth and strong current ratio. Investors should closely monitor Ducommun's ability to improve its profitability and cash flow generation to justify its current valuation.
While Ducommun operates in a generally attractive aerospace and defense industry, its financial metrics present a complex picture. The company's negative net income and high leverage relative to its sector peers suggest caution. The Hold rating reflects the balance between the company's growth potential in its niche markets and the risks associated with its current financial performance and valuation. A significant improvement in profitability and cash flow is needed to warrant a more positive outlook.
Business Strategy & Overview
Ducommun operates through two segments: Electronic Systems and Structural Systems, serving the aerospace and defense, industrial, medical, and other industries. The Electronic Systems segment provides cable assemblies, printed circuit board assemblies, and higher-level electronic components. The Structural Systems segment designs and manufactures aero structure components, structural assembly products, and metal and composite bonded structures. This diversification allows Ducommun to participate in various stages of the manufacturing process and cater to a broad customer base.
The company's strategic positioning involves providing engineered products and services to critical industries, particularly aerospace and defense. Ducommun aims to be a key supplier of specialized components and assemblies, leveraging its engineering expertise and manufacturing capabilities. This strategy requires continuous investment in technology and innovation to meet the evolving needs of its customers. The company's focus on high-reliability applications and stringent quality standards is crucial for maintaining its competitive edge in these industries.
Ducommun's business model relies on long-term contracts and relationships with major aerospace and defense companies. These contracts often involve complex engineering and manufacturing requirements, providing a degree of stickiness and recurring revenue. However, the company is also exposed to the cyclical nature of the aerospace and defense industries, which can impact its revenue and profitability. The company's ability to secure new contracts and maintain existing relationships is essential for its long-term success.
The company's growth strategy includes expanding its product offerings, entering new markets, and pursuing strategic acquisitions. Ducommun has historically made acquisitions to enhance its capabilities and broaden its customer base. These acquisitions can provide access to new technologies, markets, and customers, but also pose integration challenges. The company's ability to successfully integrate acquired businesses is critical for realizing the expected synergies and returns.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
7.9%
Sector: 6.4%
+24% VS SCTR
Economic Moat Analysis
Ducommun's economic moat can be characterized as Narrow. The company benefits from some degree of customer switching costs, particularly in the aerospace and defense industries, where stringent qualification processes and long-term contracts create barriers to entry. Once a component or assembly is approved for use in an aircraft or defense system, it can be costly and time-consuming for customers to switch to a different supplier. This provides Ducommun with a degree of pricing power and revenue stability.
The company also possesses some intangible assets in the form of engineering expertise and proprietary manufacturing processes. These assets are particularly valuable in the Electronic Systems segment, where specialized knowledge and technical capabilities are required to design and manufacture complex electronic components. However, these intangible assets are not necessarily unique or difficult to replicate, limiting the strength of the moat.
Ducommun's moat is further constrained by the competitive nature of the aerospace and defense industries. The company faces competition from larger, more established players with greater resources and broader product offerings. These competitors may be able to offer lower prices or more comprehensive solutions, putting pressure on Ducommun's margins and market share. The company's ability to differentiate itself through innovation, quality, and customer service is crucial for maintaining its competitive position.
While Ducommun's focus on specialized components and assemblies provides some degree of differentiation, the company's moat is not wide enough to provide a significant competitive advantage. The company's profitability and returns on capital are not consistently above average, suggesting that it does not possess a durable competitive advantage. The company's ability to strengthen its moat through innovation, customer relationships, and strategic acquisitions will be critical for its long-term success.
Financial Health & Profitability
Ducommun's financial health presents a mixed picture. While the company has shown recent revenue growth, its profitability has been inconsistent. The TTM revenue of $824.73 million represents a 7.9% increase compared to the previous year, exceeding the sector average of 6.6%. However, the company's net income of -$33.94 million indicates a loss, and its operating margin of -3.3% is significantly below the sector average of 6.2%. This suggests that the company is struggling to translate revenue growth into profitability.
The company's gross margin of 26.5% is also below the sector average of 35.8%, indicating that it may be facing cost pressures or pricing challenges. The quarterly financial history reveals that gross margins have fluctuated, but generally remained in the 20-26% range. The operating margin has also varied significantly, with a sharp decline in Q3 FY2025 due to a substantial net loss. This volatility raises concerns about the company's ability to consistently generate profits.
Ducommun's balance sheet appears relatively healthy, with a current ratio of 3.50, indicating strong liquidity. The company has $50.92 million in total cash and $298.79 million in total debt, resulting in a debt-to-equity ratio of 45.00, which is lower than the sector average of 70.00. This suggests that the company is not excessively leveraged. However, the company's free cash flow of $3.52 million is relatively low, indicating that it may need to improve its cash flow generation to support its growth initiatives and debt obligations.
The company's return on equity (ROE) of -4.7% is significantly below the sector average of 9.2%, reflecting its poor profitability. The company's ability to improve its profitability and cash flow generation will be critical for its long-term financial health. Investors should closely monitor the company's financial performance and its ability to execute its growth strategy while maintaining a healthy balance sheet.
Valuation Assessment
Ducommun's valuation appears stretched based on several key metrics. The company's P/E ratio is not applicable (N/A) due to its negative net income, making it difficult to assess its valuation relative to earnings. The EV/EBITDA ratio of 389.1x is significantly higher than the sector average of 5.7x, indicating that the company is trading at a substantial premium to its peers. This premium may be justified if the company is expected to generate significantly higher growth or profitability in the future, but its recent financial performance does not support this expectation.
The company's free cash flow yield is also relatively low, given its market capitalization of $1.81 billion and free cash flow of $3.52 million. This suggests that investors are not receiving a significant return on their investment in terms of cash flow. The company's valuation may be based on expectations of future growth and profitability improvements, but these expectations are not yet reflected in its current financial performance.
Compared to its historical valuation, Ducommun's current valuation appears high. The company's stock price has increased significantly in recent years, driven by positive sentiment in the aerospace and defense industries. However, the company's financial performance has not kept pace with its stock price appreciation, leading to a disconnect between its valuation and its fundamentals. Investors should exercise caution when considering an investment in Ducommun at its current valuation.
Given the company's negative net income, high EV/EBITDA multiple, and low free cash flow yield, the stock appears overvalued. The Hold rating reflects the uncertainty surrounding the company's ability to improve its profitability and cash flow generation to justify its current valuation. A more attractive entry point may be available if the company's stock price declines or if its financial performance improves significantly.
Risk & Uncertainty
Ducommun faces several specific risks that could impact its business and financial performance. One of the primary risks is its reliance on the aerospace and defense industries, which are subject to cyclical fluctuations and government spending priorities. A slowdown in these industries or a reduction in defense spending could negatively impact the company's revenue and profitability. The company's ability to diversify its customer base and enter new markets is crucial for mitigating this risk.
Another risk is the company's exposure to supply chain disruptions and raw material price increases. The aerospace and defense industries rely on a complex global supply chain, and disruptions to this supply chain could impact the company's ability to obtain the necessary materials and components to manufacture its products. Raw material price increases could also put pressure on the company's margins. The company's ability to manage its supply chain and negotiate favorable pricing with its suppliers is essential for mitigating this risk.
Ducommun also faces competition from larger, more established players in the aerospace and defense industries. These competitors may have greater resources and broader product offerings, putting pressure on the company's margins and market share. The company's ability to differentiate itself through innovation, quality, and customer service is crucial for maintaining its competitive position. The company's success in securing new contracts and maintaining existing relationships will also be critical for its long-term success.
Bulls Say / Bears Say
The Bull Case
BULL VIEWDucommun's strong position in the growing aerospace and defense markets will drive revenue growth and improve profitability.
BULL VIEWThe company's strategic acquisitions and focus on high-value engineered products will expand its market share and enhance its competitive advantage.
BULL VIEWDucommun's healthy balance sheet and strong current ratio provide financial flexibility to pursue growth opportunities and weather economic downturns.
The Bear Case
BEAR VIEWDucommun's negative net income and high EV/EBITDA multiple indicate that the stock is overvalued and vulnerable to a correction.
BEAR VIEWThe company's reliance on the cyclical aerospace and defense industries exposes it to significant revenue and earnings volatility.
BEAR VIEWDucommun's low free cash flow generation and high debt levels limit its ability to invest in growth and return capital to shareholders.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score DCO and 4,400+ other equities.
DUCOMMUN INC /DE/ exhibits a 3776% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
-2.6%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
26.5%
Sector: 35.8%
Operating Margin
Core business profitability
-3.3%
Sector: 6.2%
Net Margin
Bottom-line profitability
-3.4%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
