DSGR Stock Forecast & Price Target

Distribution Solutions Group Inc. has demonstrated significant financial growth, with Q2/25 adjusted EBITDA rising 7.5% year-over-year to $48.6 million, surpassing both internal estimates and consensus expectations. Additionally, the company achieved a 14.3% year-over-year increase in revenue, reaching $502.4 million, again outpacing forecasts. The positive performance is complemented by a notable 53.3% revenue growth in the Canada Branch, attributed to the Source Atlantic acquisition, and organic revenue growth of 6.5% year-over-year in the legacy Canada Branch business, indicating robust operational improvements.

Distribution Solutions Group Inc faces a negative outlook due to a slight decline in adjusted EBITDA, which was down 1.3% year-over-year to $48.5 million, falling short of estimates and consensus expectations. The company's TestEquity segment, accounting for 39% of total revenue, also experienced a 1.3% year-over-year decline, primarily attributed to soft sales trends amid economic uncertainty and tariff concerns, further exacerbating pressures on the adjusted EBITDA margin. Additionally, the Lawson Products segment, representing 25% of total revenue, reported an organic decrease of 1.0% year-over-year, driven by diminished sales in the military market due to reduced government spending, which compounds the challenges faced by the company's overall financial performance.