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Dorman Products (DORM)
NASDAQ:DORM
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Dorman Products
(NASDAQ:DORM)
75Outperform
Positive Factors
Earnings
Q4/24 net sales increased 8% to $533.8 million versus $494.3 million in Q4/23, with an adjusted gross margin of 41.7% versus 39.3% in Q4/23.
Financial Performance
Q3/24 Adjusted EPS significantly exceeds expectations; guidance raised for 2024; raising price target.
Negative Factors
Market Pressures
Heavy Duty sales declined 8%, while segment profit margin decreased 470 bps to 2.1% driven by freight industry market pressures.
Segment Performance
Heavy Duty and Specialty Vehicle had declines of 70.7% and 18.5% in segment profit.
Dorman Products (DORM) vs. S&P 500 (SPY)
Market Cap
$3.48B
Dividend YieldN/A
Average Volume (3M)277.31K
Price to Earnings (P/E)18.2
Beta (1Y)0.68
Revenue Growth4.11%
EPS Growth50.07%
CountryUS
Employees3,787
SectorConsumer Cyclical
Sector Strength62
IndustryAuto - Parts
Share Statistics
EPS (TTM)6.14
Shares Outstanding30,558,022
10 Day Avg. Volume342,701
30 Day Avg. Volume277,309
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)N/A
Price to Sales (P/S)1.91
Price to Cash Flow (P/CF)13.40
P/FCF Ratio13.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$149.00Price Target Upside33.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Dorman Products Business Overview & Revenue Model
Company DescriptionDorman Products, Inc. is a leading supplier in the automotive aftermarket industry, specializing in providing a wide array of replacement parts, fasteners, and service line products primarily for passenger vehicles and light trucks. The company operates in sectors such as automotive and heavy-duty industries, offering innovative and high-quality solutions to meet the maintenance and repair needs of its customers. With a commitment to enhancing vehicle reliability and performance, Dorman Products has established itself as a trusted source for independent repair shops, retailers, and distributors.
How the Company Makes MoneyDorman Products generates revenue through the design, manufacturing, and distribution of automotive replacement parts and accessories, which are sold to a diverse customer base including retailers, wholesalers, and repair shops. The company's key revenue streams include sales from its extensive catalog of automotive parts, encompassing thousands of product lines that cover a wide range of vehicle makes and models. Additionally, Dorman Products benefits from strong relationships with major automotive retailers and parts distributors, leveraging these partnerships to expand its market reach and enhance its distribution capabilities. The company's focus on innovation and expanding its product offerings also contributes to maintaining a competitive edge and driving revenue growth.
Dorman Products Financial Statement Overview
Summary
Dorman Products exhibits solid financial health with strong revenue growth, robust profit margins, and a stable balance sheet. The company effectively manages its leverage and demonstrates efficient cash flow generation. With positive trends in profitability and cash flow, Dorman Products is well-positioned to capitalize on opportunities within the vehicles industry despite economic challenges.Income Statement
Dorman Products has shown consistent revenue growth over the years, with a revenue growth rate of approximately 4.1% from 2023 to 2024. The company maintains a strong gross profit margin of 40.1% and a solid net profit margin of 9.5% for 2024. EBIT and EBITDA margins are robust at 14.6%. This indicates efficient cost management and strong profitability amidst industry challenges.85
Very Positive
Balance Sheet
The company's balance sheet reflects a moderate debt-to-equity ratio of 0.44, suggesting a manageable level of leverage. Stockholders' equity increased to $1.29 billion, leading to a strong equity ratio of 53.4%. Return on equity stands at 14.7%, showcasing a good return on investments from shareholders' equity. The company's capital structure is stable, with a healthy balance between debt and equity.78
Positive
Cash Flow
Dorman Products has demonstrated a strong free cash flow growth rate of 16.3% from 2023 to 2024, indicating improved cash efficiency. Operating cash flow to net income ratio is high at 1.22, reflecting effective cash generation from operations. Free cash flow to net income ratio is also solid at 1.01, denoting a strong capability to convert earnings into available cash.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.01B | 1.93B | 1.73B | 1.35B | 1.09B | Gross Profit |
| 806.36M | 685.42M | 564.45M | 462.92M | 383.12M | EBIT |
| 292.91M | 214.76M | 127.11M | 171.55M | 101.07M | EBITDA |
| 352.68M | 271.29M | 275.66M | 221.81M | 133.37M | Net Income Common Stockholders |
| 190.00M | 129.26M | 121.55M | 131.53M | 106.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 57.14M | 36.81M | 46.03M | 58.78M | 155.58M | Total Assets |
| 2.42B | 2.29B | 2.34B | 1.67B | 1.22B | Total Debt |
| 572.78M | 683.80M | 832.55M | 291.80M | 37.08M | Net Debt |
| 515.64M | 646.99M | 786.51M | 233.02M | -118.49M | Total Liabilities |
| 1.13B | 1.12B | 1.30B | 740.38M | 367.10M | Stockholders Equity |
| 1.29B | 1.17B | 1.04B | 932.74M | 853.56M |
| Cash Flow | Free Cash Flow | |||
| 191.63M | 164.79M | 3.81M | 80.50M | 136.52M | Operating Cash Flow |
| 231.05M | 208.76M | 41.69M | 100.34M | 151.97M | Investing Cash Flow |
| -39.32M | -43.90M | -526.84M | -365.32M | -30.26M | Financing Cash Flow |
| -170.98M | -174.11M | 472.50M | 168.24M | -34.48M |
Dorman Products Technical Analysis
Negative
111.86
Price Trends
125.49
Negative
129.52
Negative
119.42
Negative
Market Momentum
-1.40
Positive
42.37
Neutral
28.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DORM, the sentiment is Negative. The current price of 111.86 is below the 20-day moving average (MA) of 122.06, below the 50-day MA of 125.49, and below the 200-day MA of 119.42, indicating a bearish trend. The MACD of -1.40 indicates Positive momentum. The RSI at 42.37 is Neutral, neither overbought nor oversold. The STOCH value of 28.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DORM.
Dorman Products Risk Analysis
Dorman Products disclosed 39 risk factors in its most recent earnings report. Dorman Products reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dorman Products Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.48B | 18.20 | 15.44% | ― | 4.11% | 50.07% | |
73 Outperform | $4.39B | 26.02 | 20.25% | ― | 4.87% | -29.43% | |
71 Outperform | $10.63B | 15.72 | 11.33% | 2.92% | 3.53% | -25.71% | |
70 Outperform | $4.93B | 12.35 | 16.69% | 2.20% | 0.61% | -4.04% | |
64 Neutral | $4.09B | 8.51 | 10.81% | 4.04% | -0.70% | -7.27% | |
62 Neutral | $5.91B | 17.88 | 6.46% | 1.71% | -11.10% | -46.32% | |
59 Neutral | $11.38B | 10.18 | -0.84% | 4.04% | 1.25% | -16.04% |
* Consumer Cyclical Sector Average
Performance Comparison
DORM
Dorman Products
111.86
21.81
24.22%
BWA
BorgWarner
26.19
-6.87
-20.78%
GNTX
Gentex
21.17
-12.47
-37.07%
LEA
Lear
77.37
-52.54
-40.44%
LKQ
LKQ
42.01
-5.82
-12.17%
MOD
Modine
76.65
-15.71
-17.01%
Dorman Products Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -9.80% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
Dorman Products achieved record-breaking revenue and strong earnings growth, driven primarily by the Light Duty segment. However, the Heavy Duty segment faced significant challenges, and there is uncertainty surrounding tariffs and the Specialty Vehicle market. While the highlights showcase robust growth and financial management, the lowlights indicate market-specific struggles and external uncertainties.Highlights
Record-Breaking Revenue
Dorman Products surpassed the $2 billion annual sales mark for the first time in its history, achieving a net sales growth of 4.1% year-over-year.
Strong Fourth Quarter Performance
Consolidated net sales for the fourth quarter grew 8% year-over-year to $534 million, with an adjusted operating margin of 17.5%, expanding 210 basis points compared to the same period last year.
Impressive Earnings Growth
Adjusted diluted EPS increased 40% to $2.20, and free cash flow in the quarter was strong at $63 million, allowing for the repayment of $54 million of debt.
Light Duty Segment Success
The Light Duty segment showed net sales increase of 11% year-over-year, driven by strong customer demand and new products, resulting in a 350 basis point increase in segment profit margin.
Cash Flow and Debt Reduction
For the year, cash flow from operations was $231 million, enabling the repayment of $94 million in debt and the repurchase of 856,000 shares.
Lowlights
Heavy Duty Segment Struggles
Heavy Duty net sales were down 8% year-over-year due to ongoing market challenges and delayed repairs, impacting margins negatively.
Specialty Vehicle Market Challenges
New machine sales remained sluggish due to manufacturers' inventory destocking efforts, although there was a year-over-year sales growth of 5% in the quarter.
Uncertainty Around Tariffs
The evolving trade situation and potential tariffs pose significant uncertainty, impacting forward guidance and market outlook.
Company Guidance
During Dorman Products' Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for 2025, highlighting several key metrics. They anticipate net sales growth of 3% to 5% compared to 2024, driven by strong performance in their light-duty segment and modest increases in their specialty vehicle segment. Despite market challenges, heavy-duty sales are expected to remain flat. The company projects adjusted diluted earnings per share to range from $7.55 to $7.85, representing a growth of 6% to 10% from 2024. In 2024, Dorman achieved annual sales exceeding $2 billion for the first time, with net sales growth of 4.1% year-over-year. For the fourth quarter, consolidated net sales grew by 8% year-over-year to $534 million, with an adjusted operating margin of 17.5%, a 210 basis point increase. Free cash flow for the quarter was $63 million, facilitating a debt repayment of $54 million. The company emphasizes its strategic focus on innovation, operational excellence, and strategic growth opportunities as they move into 2025.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.