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Relative to Consumer Staples Sector Median (N=180)
Metric
DXPE
Benchmark
P/E Ratio
25.8x
-22%
EV/EBITDA
13.2x
+90%
Price / Book
4.5x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-57.7%
$64.92Spot: $153.56
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Staples 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: 50GRADE 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
17.4%
Sector: 7.7%
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, DXP ENTERPRISES INC (DXPE) receives a "Hold" rating with a composite score of 50.3/100, ranked #479 out of 4446 stocks. Key factor scores: Quality 50/100, Value 66/100, Momentum 65/100. This is quantitative analysis only — not investment advice.
DXP ENTERPRISES INC (DXPE) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does DXP ENTERPRISES INC Do?
DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to the energy and industrial customers primarily in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory management solutions; and offers outsourced MRO solutions for sourcing MRO products, including inventory optimization and management, store room management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages, remanufactures pumps, and manufactures branded private label pumps. The company was founded in 1908 and is based in Houston, Texas. DXP ENTERPRISES INC (DXPE) is classified as a mid-cap stock in the Consumer Staples sector, specifically within the Wholesale industry. The company is led by CEO David R. Little and employs approximately 2,490 people, headquartered in HOUSTON, Texas. With a market capitalization of $2.2B, DXPE is one of the notable companies in the Consumer Staples sector.
DXP ENTERPRISES INC (DXPE) Stock Rating — Hold (April 2026)
As of April 2026, DXP ENTERPRISES INC receives a Hold rating with a composite score of 50.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.DXPE ranks #479 out of 4,446 stocks in our coverage universe. Within the Consumer Staples sector, DXP ENTERPRISES INC ranks #16 of 180 stocks, placing it in the top 10% of its Consumer Staples 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%).
DXPE Stock Price and 52-Week Range
DXP ENTERPRISES INC (DXPE) currently trades at $153.56. The stock gained $1.92 (1.3%) in the most recent trading session. The 52-week high for DXPE is $171.70, which means the stock is currently trading -10.6% from its annual peak. The 52-week low is $67.68, putting the stock 126.9% above its annual trough. Recent trading volume was 91K shares, suggesting relatively thin trading activity.
Is DXPE Overvalued or Undervalued? — Valuation Analysis
DXP ENTERPRISES INC (DXPE) carries a value factor score of 66/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 25.78x, compared to the Consumer Staples sector average of 33.11x — a discount of 22%. The price-to-book ratio stands at 4.50x, versus the sector average of 1.74x. The price-to-sales ratio is 1.14x, compared to 0.35x for the average Consumer Staples stock. On an enterprise value basis, DXPE trades at 13.20x EV/EBITDA, versus 6.93x for the sector.
Overall, DXPE's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
DXP ENTERPRISES INC Profitability — ROE, Margins, and Quality Score
DXP ENTERPRISES INC (DXPE) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 17.4%, compared to the Consumer Staples sector average of 7.7%, which is within a healthy range. Return on assets (ROA) comes in at 5.2% versus the sector average of 3.1%.
On a margin basis, DXP ENTERPRISES INC reports gross margins of 31.4%, compared to 26.2% for the sector. The operating margin is 8.6% (sector: 2.9%). Net profit margin stands at 4.4%, versus 1.6% for the average Consumer Staples stock. Revenue growth is running at 15.3% on a trailing basis, compared to 3.1% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
DXPE Debt, Balance Sheet, and Financial Health
DXP ENTERPRISES INC has a debt-to-equity ratio of 238.0%, compared to the Consumer Staples sector average of 72.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 3.34x, indicating strong short-term liquidity. Total debt on the balance sheet is $626M. Cash and equivalents stand at $124M.
DXPE has a beta of 1.41, meaning it is more volatile than the broader market — a $10,000 investment in DXPE would be expected to move 41.0% more than the S&P 500 on any given day. The stability factor score for DXP ENTERPRISES INC is 48/100, reflecting average volatility within the normal range for its sector.
DXP ENTERPRISES INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, DXP ENTERPRISES INC reported revenue of $1.96B and earnings per share (EPS) of $5.65. Net income for the quarter was $87M. Gross margin was 31.4%. Operating income came in at $170M.
In FY 2025, DXP ENTERPRISES INC reported revenue of $2.02B and earnings per share (EPS) of $5.65. Net income for the quarter was $89M. Gross margin was 31.5%. Revenue grew 11.9% year-over-year compared to FY 2024. Operating income came in at $177M.
In Q3 2025, DXP ENTERPRISES INC reported revenue of $514M and earnings per share (EPS) of $1.38. Net income for the quarter was $22M. Gross margin was 31.4%. Revenue grew 8.6% year-over-year compared to Q3 2024. Operating income came in at $44M.
In Q2 2025, DXP ENTERPRISES INC reported revenue of $499M and earnings per share (EPS) of $1.50. Net income for the quarter was $24M. Gross margin was 31.6%. Revenue grew 11.9% year-over-year compared to Q2 2024. Operating income came in at $46M.
Over the past 8 quarters, DXP ENTERPRISES INC has demonstrated a growth trajectory, with revenue expanding from $446M to $1.96B. Investors analyzing DXPE stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
DXPE Dividend Yield and Income Analysis
DXP ENTERPRISES INC (DXPE) does not currently pay a dividend. This is common among smaller companies in the Wholesale industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Consumer Staples dividend stocks may want to explore other Consumer Staples stocks or use the stock screener to filter by dividend yield.
DXPE Momentum and Technical Analysis Profile
DXP ENTERPRISES INC (DXPE) has a momentum factor score of 65/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 27/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 15/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
DXPE vs Competitors — Consumer Staples Sector Ranking and Peer Comparison
Comparing DXPE against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full DXPE vs S&P 500 (SPY) comparison to assess how DXP ENTERPRISES INC stacks up against the broader market across all factor dimensions.
DXPE Next Earnings Date
No upcoming earnings date has been announced for DXP ENTERPRISES INC (DXPE) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy DXPE? — Investment Thesis Summary
DXP ENTERPRISES INC presents a balanced picture with arguments on both sides. The value score of 66/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 65/100, suggesting the trend favors buyers.
In summary, DXP ENTERPRISES INC (DXPE) earns a Hold rating with a composite score of 50.3/100 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 DXPE stock.
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Institutional Research Dossier
DXP ENTERPRISES INC (DXPE) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
DXP Enterprises is currently rated a Hold, and this assessment stems from a balanced view of its operational strengths and financial constraints. While the company exhibits robust profitability metrics compared to its sector, its negative free cash flow and substantial debt burden temper enthusiasm. The company's strategic focus on MRO distribution and service provision offers stability, but its capital allocation decisions warrant close scrutiny, justifying a neutral stance until clearer trends emerge.
The primary takeaway is that DXP Enterprises presents a mixed bag of compelling profitability and concerning cash flow dynamics. Its superior margins and return on equity relative to the consumer staples sector are attractive, yet the negative free cash flow raises questions about its long-term financial sustainability. Investors should closely monitor the company's ability to convert its earnings into cash and manage its debt obligations before considering a more decisive investment position.
Business Strategy & Overview
DXP Enterprises operates as a distributor of maintenance, repair, and operating (MRO) products, equipment, and services, primarily targeting the energy and industrial sectors in the United States and Canada. The company segments its operations into Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). This diversified approach allows DXP to cater to a wide range of customer needs, from basic MRO supplies to complex engineered solutions. The SC segment, being the core, provides a comprehensive suite of MRO products and integrated services, including technical expertise and logistics, which are crucial for maintaining operational efficiency in demanding industries.
The SCS segment focuses on optimizing procurement and inventory management for its clients, offering outsourced MRO solutions aimed at reducing costs and improving productivity. Programs like SmartAgreement, SmartBuy, and SmartSource are designed to streamline MRO procurement processes, enhancing efficiency and control for its customers. This segment's emphasis on value-added services differentiates DXP from traditional distributors, fostering stronger customer relationships and recurring revenue streams. The IPS segment further diversifies DXP's offerings by fabricating custom-made pump packages, remanufacturing pumps, and manufacturing branded private label pumps, providing specialized solutions for critical industrial applications.
DXP's strategic positioning within the MRO distribution landscape is characterized by its focus on high-value, technically demanding products and services. This approach allows the company to command higher margins compared to distributors of commodity-like products. The company's emphasis on integrated solutions, combining product distribution with technical support and inventory management, creates a stickier customer base and reduces the threat of commoditization. Furthermore, DXP's geographic focus on the energy and industrial sectors in North America provides a degree of specialization and expertise, enabling it to better serve the unique needs of these industries.
However, DXP's reliance on the cyclical energy and industrial sectors also exposes it to macroeconomic volatility. Fluctuations in commodity prices and industrial production can significantly impact demand for its products and services. To mitigate this risk, DXP has been diversifying its customer base and expanding its service offerings, aiming to reduce its dependence on any single industry or customer. The company's acquisition strategy has also played a role in expanding its geographic reach and product portfolio, further diversifying its revenue streams and enhancing its competitive position.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
15.3%
Sector: 3.1%
+386% VS SCTR
Economic Moat Analysis
DXP Enterprises possesses a narrow economic moat, primarily derived from switching costs and, to a lesser extent, intangible assets. The switching costs arise from the integrated nature of its service offerings, particularly within the Supply Chain Services (SCS) segment. Customers who have implemented DXP's SmartAgreement, SmartBuy, or SmartSource programs face significant disruption and potential cost overruns if they were to switch to a competitor. The integration of DXP's systems with their own operations, coupled with the training and process adjustments required, creates a barrier to exit.
The intangible assets contributing to DXP's moat are primarily related to its technical expertise and brand reputation within specific niches, such as pumping solutions. The company's ability to fabricate custom-made pump packages and remanufacture pumps requires specialized knowledge and engineering capabilities, which are not easily replicated. Furthermore, its branded private label pumps benefit from a degree of brand recognition and customer loyalty, providing a competitive edge in the market. However, these intangible assets are not pervasive across all of DXP's product and service offerings, limiting the overall strength of its moat.
The absence of a wide moat is primarily due to the fragmented nature of the MRO distribution industry and the relatively low barriers to entry for many of the products DXP offers. While the company's integrated service offerings and technical expertise provide some differentiation, it still faces competition from a large number of distributors, many of whom offer similar products and services. The commoditization of certain MRO products further weakens DXP's competitive position, as customers can easily switch to alternative suppliers based on price.
Furthermore, DXP's reliance on the energy and industrial sectors exposes it to cyclical downturns, which can erode its competitive advantages. During periods of economic weakness, customers may prioritize cost-cutting measures, leading them to switch to lower-cost suppliers or delay maintenance and repair activities. This increased price sensitivity can diminish the value of DXP's integrated service offerings and technical expertise, weakening its moat.
The moat's sustainability is contingent on DXP's ability to continue innovating and expanding its value-added services. By developing new and differentiated solutions, such as advanced inventory management systems or specialized engineering services, DXP can strengthen its customer relationships and increase switching costs. However, failure to adapt to changing customer needs and technological advancements could erode its competitive advantages and weaken its moat over time.
Financial Health & Profitability
DXP Enterprises exhibits a mixed financial profile. The company's revenue has shown consistent growth, with TTM revenue reaching $2.02 billion, a notable increase from $1.80 billion in FY2024 and $1.68 billion in FY2023. This growth trajectory indicates a healthy demand for its products and services. Gross margins have remained relatively stable, hovering around 31%, while operating margins have improved slightly, reaching 8.6% TTM, compared to 8.1% in FY2024. These margins are significantly higher than the sector averages, indicating strong operational efficiency and pricing power.
However, the company's free cash flow (FCF) is a cause for concern. The TTM FCF is negative at -$51.45 million, which raises questions about its ability to generate cash from its operations. This negative FCF could be attributed to increased working capital requirements or capital expenditures. Further investigation into the drivers of this negative FCF is warranted. The company's net income has also shown positive growth, reaching $88.68 million TTM, compared to $70.49 million in FY2024, indicating improved profitability.
DXP's balance sheet reveals a significant debt burden. The company has total debt of $625.99 million, which is considerably higher than its total cash of $123.83 million. This high level of debt increases the company's financial risk and limits its flexibility to pursue growth opportunities or weather economic downturns. The debt-to-equity ratio of 238.00 is also significantly higher than the sector average of 70.50, further highlighting the company's high leverage. However, the current ratio of 3.34 indicates strong liquidity, suggesting that the company has sufficient current assets to cover its short-term liabilities.
The quarterly financial history reveals a consistent trend of revenue and net income growth. However, the absence of FCF data in the quarterly reports makes it difficult to assess the company's cash flow generation on a quarterly basis. The stable gross margins and improving operating margins suggest that the company is effectively managing its costs and improving its operational efficiency. However, the high debt levels and negative FCF remain key areas of concern.
Compared to the sector, DXP exhibits superior profitability metrics, including higher ROE (17.4% vs. 7.8%), gross margin (31.4% vs. 26.0%), operating margin (8.6% vs. 3.1%), and net margin (4.4% vs. 1.7%). However, its high debt-to-equity ratio and negative FCF are significant weaknesses compared to its peers. Overall, DXP's financial health is a mixed bag, with strong profitability offset by high leverage and negative cash flow.
Valuation Assessment
DXP Enterprises' valuation presents a nuanced picture. The company's P/E ratio of 22.8x is lower than the sector average of 34.2x, suggesting that the stock may be undervalued relative to its earnings. Similarly, its EV/EBITDA ratio of 2.8x is significantly lower than the sector average of 7.3x, further indicating potential undervaluation. These multiples suggest that the market may not be fully recognizing the company's strong profitability and growth potential.
However, the negative free cash flow complicates the valuation assessment. Traditional valuation methods, such as discounted cash flow analysis, are difficult to apply when FCF is consistently negative. In such cases, investors may need to rely on alternative valuation metrics, such as revenue multiples or EBITDA multiples, to assess the company's worth. The company's price-to-sales ratio, while not provided, would offer another perspective on its valuation relative to its revenue generation.
Considering the company's strong revenue growth of 15.3% compared to the sector average of 4.3%, a premium valuation may be justified. However, the high debt levels and negative FCF warrant caution. Investors should carefully consider the company's ability to convert its earnings into cash and manage its debt obligations before making a valuation judgment. The company's historical valuation trends should also be taken into account, as well as any potential catalysts that could drive future growth or profitability.
The BCR proprietary quant model assigns a Value score of 68/100, indicating that the stock is relatively undervalued based on its multiples. However, the Investment score of 27/100 suggests that the market has concerns about the company's capital allocation decisions and growth prospects. This divergence in scores highlights the conflicting signals in the company's valuation profile.
Overall, DXP Enterprises' valuation appears to be fair, considering its strong profitability and growth potential, but the negative FCF and high debt levels warrant caution. The stock may be undervalued relative to its earnings and EBITDA, but investors should carefully assess the company's cash flow generation and debt management before making an investment decision. A more conservative valuation approach may be warranted until the company demonstrates its ability to generate positive FCF and reduce its debt burden.
Risk & Uncertainty
DXP Enterprises faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its reliance on the cyclical energy and industrial sectors. Economic downturns in these sectors can lead to reduced demand for its products and services, resulting in lower revenue and profitability. Fluctuations in commodity prices, particularly oil and gas, can also impact the company's performance, as lower prices can lead to reduced capital spending by its customers.
Another key risk is the company's high debt levels. The significant debt burden increases its financial risk and limits its flexibility to pursue growth opportunities or weather economic downturns. Rising interest rates could further exacerbate this risk, as it would increase the company's interest expense and reduce its profitability. The company's ability to service its debt obligations is dependent on its ability to generate sufficient cash flow, which is currently a concern given its negative FCF.
Competition within the MRO distribution industry is also a significant risk. The industry is highly fragmented, with a large number of distributors offering similar products and services. This intense competition can put pressure on prices and margins, reducing the company's profitability. The rise of e-commerce and online marketplaces also poses a threat, as it increases price transparency and makes it easier for customers to switch to alternative suppliers.
Integration risk associated with acquisitions is another potential concern. DXP has historically grown through acquisitions, and the success of these acquisitions depends on its ability to effectively integrate the acquired businesses into its existing operations. Failure to successfully integrate acquisitions can lead to cost overruns, loss of key personnel, and reduced synergies, negatively impacting the company's financial performance.
Finally, supply chain disruptions could pose a risk to DXP's operations. Disruptions in the supply of MRO products could lead to delays in fulfilling customer orders, resulting in lost revenue and damage to its reputation. Geopolitical events, natural disasters, and other unforeseen circumstances could all disrupt the company's supply chain.
Bulls Say / Bears Say
The Bull Case
BULL VIEWDXP's superior profitability metrics, including higher ROE and margins compared to the sector, demonstrate its operational efficiency and pricing power, justifying a premium valuation.
BULL VIEWThe company's strategic focus on value-added services and integrated solutions creates a sticky customer base and reduces the threat of commoditization, ensuring long-term revenue stability.
BULL VIEWDXP's consistent revenue growth, driven by its diversified product portfolio and geographic reach, positions it to capitalize on the increasing demand for MRO products and services in the energy and industrial sectors.
The Bear Case
BEAR VIEWDXP's negative free cash flow and high debt levels raise serious concerns about its financial sustainability and ability to fund future growth, making it a risky investment.
BEAR VIEWThe company's reliance on the cyclical energy and industrial sectors exposes it to significant macroeconomic volatility, potentially leading to reduced demand and lower profitability during economic downturns.
BEAR VIEWIntense competition within the fragmented MRO distribution industry could put pressure on prices and margins, eroding DXP's profitability and limiting its growth potential.
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 DXPE and 4,400+ other equities.
DXP ENTERPRISES INC exhibits a 112% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.2%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
31.4%
Sector: 26.2%
Operating Margin
Core business profitability
8.6%
Sector: 2.9%
Net Margin
Bottom-line profitability
4.4%
Sector: 1.6%
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.
