DXP Enterprises, Inc. (DXPE): A Bull Case Theory 

We came across a bullish thesis on DXP Enterprises, Inc. on Value investing subreddit by BeatingTheTide. In this article, we will summarize the bulls’ thesis on DXPE. DXP Enterprises, Inc.’s share was trading at $96.50 as of December 2nd. DXPE’s trailing P/E were 17.64 according to Yahoo Finance.

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States, Canada, and internationally remains a compelling bullish case as the company continues to execute well across its diversified segments—Innovative Pumping Solutions (IPS), Service Centers, and Supply Chain Services (SCS)—supported by record backlogs and disciplined capital allocation. Consensus projects $499 million in Q3 revenue and $1.57 in EPS, but a stronger outcome appears achievable, with a base case of $502–$512 million in revenue, $1.55–$1.65 in EPS, and adjusted EBITDA margins above 11.2%.

Momentum remains anchored by an all-time high IPS energy backlog, resilient Service Centers performance, improving SCS margins, and an active M&A pipeline. In Q2, DXPE delivered $1.43 EPS, beating estimates, with revenue of $498.7 million essentially in line; notably, IPS grew 27.5% year-over-year at 19.9% margins, Service Centers rose 10.8% at 14.8%, and SCS turned a large contract profitable in July.

Management’s commentary underscores confidence in sustained project flow, with IPS bookings supporting visibility for the next 9–12 months. The Water segment, now posting its 11th consecutive quarterly increase, continues to buffer cyclicality, while recent tuck-in acquisitions such as McBride and Moores Pump—along with three to four more expected in 2H—are set to expand scale and lift mix quality.

The macro backdrop, with manufacturing sub-50 but services above 50, remains conducive for DXPE’s hybrid MRO-plus-project model. Key watchpoints include backlog trends, SCS profitability improvements, ongoing M&A cadence, and stable leverage as free cash flow normalizes. Despite risks from project timing or slower SCS ramp, DXPE’s strong fundamentals and strategic M&A flywheel reinforce an attractive risk/reward setup heading into Q3.

Previously we covered a bullish thesis on WESCO International, Inc. (WCC) by Stock Analysis Compilation in December 2024, highlighting its strong position in electrical distribution and exposure to EVs, solar, and data center growth. The stock has appreciated 31.17% since then as the thesis played out. It still stands on long-term electrification tailwinds. BeatingTheTide shares a similar view on DXP Enterprises (DXPE), emphasizing diversified exposure and record backlogs.

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Disclosure: None.