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DMC Global Inc (BOOM)
NASDAQ:BOOM
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DMC Global
(NASDAQ:BOOM)58Neutral
Positive Factors
Acquisition Proposal
Steel Connect is reiterating the proposal to acquire the remaining shares of DMC it does not already own for $16.50 in cash.
Negative Factors
Leadership Changes
The retirement of CEO Michael Kuta and recent Board changes, coupled with lackluster end-market demand, make it difficult to analyze performance going forward.
Market Competition
Pricing for DynaEnergetics' perforating systems continues to face headwinds from tempered North American completion activity coupled with competition from machine shops eroding market share and pricing power.
DMC Global (BOOM) vs. S&P 500 (SPY)
Market Cap
$167.00M
Dividend YieldN/A
Average Volume (3M)254.75K
Price to Earnings (P/E)―
Beta (1Y)0.85
Revenue Growth-10.61%
EPS Growth-858.23%
CountryUS
Employees1,800
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)-8.19
Shares Outstanding20,241,852
10 Day Avg. Volume285,556
30 Day Avg. Volume254,745
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.26
Price to Cash Flow (P/CF)3.50
P/FCF Ratio3.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.50Price Target Upside15.15% Upside
Rating ConsensusHold
Number of Analyst Covering2
DMC Global Business Overview & Revenue Model
Company DescriptionDMC Global Inc. (BOOM) is a diversified technology company that operates in the industrial sector, specializing in engineered products and services. The company is known for its two primary business units: DynaEnergetics and NobelClad. DynaEnergetics provides advanced explosive components and systems for the oil and gas industry, while NobelClad focuses on explosion-welded clad metal plates for various industrial applications, including petrochemical and alternative energy markets.
How the Company Makes MoneyDMC Global Inc. generates revenue through its two main business units. DynaEnergetics earns income by designing, manufacturing, and selling perforating products and systems, which are crucial for efficient oil and gas extraction. These products are sold directly to oilfield service companies and operators worldwide. NobelClad, on the other hand, generates revenue by producing and selling explosion-welded clad metal plates, which are used in a wide range of industries for equipment that requires high strength and corrosion resistance. NobelClad's clients span various sectors, including chemical processing, shipbuilding, and power generation. DMC Global's earnings are also influenced by its strategic partnerships and global distribution network, which enhance its market reach and operational efficiency.
DMC Global Financial Statement Overview
Summary
DMC Global faces significant challenges in profitability and revenue growth, as indicated by declining margins and negative net income. However, the company maintains a solid balance sheet with improved leverage ratios and continues to generate positive cash flows. This mix of weaknesses in profitability and strengths in cash generation and balance sheet stability reflects a complex financial position.Income Statement
The income statement shows a declining trend in revenue and profit margins. The gross profit margin decreased from 29.5% in 2023 to 23.4% in 2024, reflecting higher costs or lower pricing power. Net profit margin turned negative in 2024, indicating a significant downturn from the previous year's 3.7%. This shift is due to the substantial net loss incurred. Revenue growth rate is also negative, highlighting challenges in maintaining sales levels.45
Neutral
Balance Sheet
The balance sheet exhibits moderate stability with reasonable equity levels. The debt-to-equity ratio improved to 0.28 in 2024 from 0.40 in 2023, indicating reduced leverage. However, return on equity (ROE) turned negative due to the net loss, which is a risk. The equity ratio stands at 37.4%, suggesting a moderate reliance on equity financing.59
Neutral
Cash Flow
Cash flow statements reveal strong free cash flow generation, with a positive free cash flow of $46.6 million in 2024. The free cash flow to net income ratio is strong, but the operating cash flow to net income is distorted due to negative net income. The company has managed to generate cash effectively despite profitability issues.66
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 642.85M | 719.19M | 654.09M | 260.12M | 229.16M | Gross Profit |
| 150.57M | 212.05M | 185.45M | 59.48M | 56.85M | EBIT |
| -131.26M | 61.18M | 29.99M | -542.00K | 2.16M | EBITDA |
| -131.26M | 95.90M | 81.38M | 10.44M | 9.85M | Net Income Common Stockholders |
| -94.45M | 26.26M | 14.18M | -1.01M | -1.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 14.29M | 43.66M | 25.14M | 30.81M | 53.92M | Total Assets |
| 671.34M | 884.50M | 878.98M | 864.41M | 279.64M | Total Debt |
| 70.82M | 163.25M | 132.80M | 147.43M | 11.26M | Net Debt |
| 56.53M | 132.21M | 107.65M | 116.61M | -16.92M | Total Liabilities |
| 233.29M | 286.44M | 310.81M | 306.69M | 82.73M | Stockholders Equity |
| 250.97M | 410.30M | 380.65M | 360.52M | 196.91M |
| Cash Flow | Free Cash Flow | |||
| 46.60M | 49.95M | 26.35M | -21.47M | 16.51M | Operating Cash Flow |
| 46.60M | 65.93M | 44.94M | -12.81M | 30.36M | Investing Cash Flow |
| -3.57M | -28.10M | -20.93M | -267.81M | -39.56M | Financing Cash Flow |
| -59.79M | -33.18M | -28.51M | 282.58M | 17.32M |
DMC Global Technical Analysis
Negative
8.25
Price Trends
7.93
Positive
8.53
Negative
10.71
Negative
Market Momentum
0.06
Positive
49.01
Neutral
28.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BOOM, the sentiment is Negative. The current price of 8.25 is below the 20-day moving average (MA) of 8.47, above the 50-day MA of 7.93, and below the 200-day MA of 10.71, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 49.01 is Neutral, neither overbought nor oversold. The STOCH value of 28.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BOOM.
DMC Global Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $11.17B | 13.88 | 27.06% | 0.75% | 16.23% | 1403.29% | |
77 Outperform | $63.45M | 1.44 | 58.31% | ― | 4.01% | ― | |
70 Outperform | $1.13B | 12.32 | 8.55% | 3.05% | -12.52% | -52.79% | |
58 Neutral | $167.00M | ― | -48.79% | ― | -10.61% | -858.23% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% | |
56 Neutral | $641.53M | 20.46 | 13.17% | 0.29% | 2.76% | -23.59% | |
50 Neutral | $298.92M | ― | -1.62% | ― | -11.47% | -187.17% |
* Energy Sector Average
Performance Comparison
BOOM
DMC Global
8.25
-8.88
-51.84%
CLB
Core Laboratories
14.85
-1.05
-6.60%
FTI
TechnipFMC
26.67
4.82
22.06%
OIS
Oil States International
4.82
-0.78
-13.93%
RES
RPC
5.41
-1.95
-26.49%
NCSM
Ncs Multistage Holdings
25.49
9.72
61.64%
DMC Global Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -0.72% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive developments, including exceeding fourth-quarter guidance and strategic initiatives to improve product offerings and operational efficiency. However, these were offset by challenges such as declining sales in Arcadia's residential segment, seasonal slowdowns at DynaEnergetics, and order backlog issues at NobelClad, compounded by tariff uncertainties. The sentiment is balanced, reflecting both positive strategic moves and ongoing challenges.Highlights
Exceeded Fourth Quarter Guidance
DMC's fourth quarter sales of $152.4 million and adjusted EBITDA of $10.4 million both exceeded guidance, reflecting stabilization and self-help initiatives.
Sales Growth in Architectural Building Products
Arcadia's sales were $60.3 million, up 4% sequentially despite a year-over-year decline due to reduced demand for luxury residential products.
Introduction of New DynaStage System
DynaEnergetics launched a new, value-engineered DynaStage system to improve downhole reliability and competitiveness, with positive feedback from customers.
Strong Performance at NobelClad
NobelClad reported fourth quarter sales of $28.4 million, its second strongest top-line performance in over a decade.
Successful Extension of Arcadia Put-Call Arrangement
An agreement was reached to extend the maturity of the Arcadia put-call arrangement until September 2026, reducing liquidity risks.
Lowlights
Decline in Arcadia's Residential Products
Arcadia's sales of commercial exterior products showed growth, but overall sales declined by 11% year-over-year due to weak demand for high-end residential windows and doors.
DynaEnergetics Sales and Seasonal Slowdown
DynaEnergetics reported a 9% sequential decline in sales, reflecting a seasonal slowdown in unconventional onshore well completions.
Decrease in NobelClad Order Backlog
Despite strong sales, NobelClad experienced a sequential decline in order backlog due to a less favorable project mix.
Impact of Tariff Uncertainty
Tariff-related uncertainty is affecting the outlook, particularly for DynaEnergetics and Arcadia's primary markets, leading to flat sales and EBITDA guidance for the first quarter.
Company Guidance
During the DMC Global fourth quarter earnings call for fiscal year 2024, the company reported sales of $152.4 million and adjusted EBITDA of $10.4 million, both surpassing their guidance range. Arcadia's sales were $60.3 million, noting a 4% sequential increase but an 11% year-over-year decrease, primarily due to reduced demand for luxury residential windows and doors. DynaEnergetics faced a 9% sequential sales decline to $63.7 million, attributed to a seasonal slowdown in unconventional onshore well completions. In contrast, NobelClad achieved its second strongest sales performance in over a decade at $28.4 million, despite a sequential decline in order backlog. The company anticipates first quarter sales for 2025 to range between $146 million and $154 million, with adjusted EBITDA expected between $8 million and $11 million.DMC Global Corporate Events
M&A TransactionsBusiness Operations and Strategy
DMC Global Rejects Steel Connect’s Acquisition Proposal
Negative
Feb 12, 2025
On February 12, 2025, DMC Global Inc. rejected a non-binding proposal from Steel Connect to acquire all outstanding shares for $10.18 per share, considering it undervalues the company’s potential and overlooks significant progress made in its Arcadia and DynaEnergetics divisions. The company’s board highlighted that the offer does not account for the recent stabilization and growth initiatives, such as Arcadia’s strategic positioning in Southern California’s reconstruction efforts and DynaEnergetics’ technological advancements in North America’s energy sector. Additionally, DMC has initiated a CEO search to guide its future value creation path.
M&A Transactions
DMC Global Receives Acquisition Proposal from Steel Connect
Neutral
Feb 10, 2025
On February 10, 2025, DMC Global Inc. acknowledged receipt of a non-binding proposal from Steel Connect to acquire all outstanding shares of the company not owned by Steel Connect, at $10.18 per share in cash. The board of directors of DMC Global will review the proposal with its legal and financial advisors, though there is no assurance of a definitive agreement or transaction approval. BofA Securities is serving as DMC’s financial advisor, with Womble Bond Dickinson and Richards, Layton & Finger as legal advisors.
Executive/Board ChangesBusiness Operations and Strategy
DMC Global Appoints James Schladen as Arcadia President
Positive
Feb 5, 2025
DMC Global Inc. announced the appointment of James H. Schladen as President of Arcadia Products, LLC, effective February 3, 2025. Mr. Schladen’s return to the role comes after a previous tenure from 2000 to 2023 and subsequent consultancy. The employment terms include a notable compensation package with performance-based incentives, highlighting the company’s strategy to leverage his extensive experience for Arcadia’s growth and stability.
Executive/Board ChangesBusiness Operations and Strategy
DMC Global Appoints James O’Leary as Interim CEO
Neutral
Dec 16, 2024
DMC Global’s Board of Directors has appointed James O’Leary as Interim President and CEO, effective November 29, 2024, with his role governed by an agreement that extends through June 30, 2025. The agreement outlines his compensation and responsibilities, including assuming critical company workstreams, managing strategic alternatives, and preparing business unit plans for fiscal 2025, with provisions for compensation in case of early termination.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.