DXP Enterprises combines technical distribution, pump-services leadership, and acquisition-led growth into a compelling but leveraged five-year value opportunity.
Overview
DXP Enterprises is a technical industrial distributor serving more than 50,000 customers across energy, chemicals, municipal water, food and beverage, aviation, transportation, and other complex end markets. Its differentiated model combines 161 Service Centers, custom-engineered pump packages, and embedded supply-chain services, helping customers reduce equipment downtime and creating higher switching costs than broadline distributors. Revenue grew from $125 million in fiscal 1996 to more than $2.0 billion in fiscal 2025, including a 16.2% CAGR from $1.11 billion in fiscal 2021 to $2.02 billion in fiscal 2025. Q1 2026 sales rose 9.5% year over year to $521.7 million, with organic growth of 8.0%, gross margin up 79 basis points to 32.3%, and adjusted EBITDA of $57.8 million, or an 11.1% margin. **The principal issue is temporary SG&A pressure:** expenses rose 14.9% to $126.1 million, causing adjusted EPS of $1.26 to miss the $1.31 consensus. **The long-term setup remains attractive**, with a probability-weighted five-year value of $244.91 versus a $163.00 baseline, supported by backlog, margin normalization, acquisitions, and municipal, reshoring, and data-center catalysts.