Breaking Down Dorman Products, Inc. (DORM) Financial Health: Key Insights for Investors

Are you keeping a close watch on Dorman Products, Inc. (DORM) and wondering about its financial stability? Let's dive into the key insights from their recent performance. In 2024, the company reported net sales of $2.0 billion, marking a 4.1% increase from the previous year. With a diluted EPS of $6.14 and an adjusted diluted EPS of $7.13, how sustainable is this growth, and what does it mean for investors? Read on to uncover a detailed breakdown of Dorman's financial health and future prospects.

Dorman Products, Inc. (DORM) Revenue Analysis

Understanding where Dorman Products, Inc. (DORM) generates its revenue and how those streams are changing is essential for investors. Here's a breakdown of their revenue streams:

Breakdown of Primary Revenue Sources:

Dorman Products, Inc. primarily generates revenue through the sale of replacement parts and components for the automotive aftermarket. These products cover a broad range of vehicle systems and applications.

Year-over-Year Revenue Growth Rate:

Dorman Products, Inc. (DORM) Profitability Metrics

Analyzing Dorman Products, Inc. (DORM)'s profitability involves examining its gross profit, operating profit, and net profit margins to understand the company's financial health and operational efficiency. By comparing these metrics against industry averages and historical trends, investors can gain valuable insights.

Here's a breakdown of Dorman Products, Inc.'s profitability metrics:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). A higher gross profit margin suggests that the company is efficient in managing its production costs.
• Operating Profit Margin: The operating profit margin reveals the percentage of revenue left after deducting both COGS and operating expenses. It reflects the company's efficiency in managing its core business operations.
• Net Profit Margin: This margin represents the percentage of revenue that translates into net income after all expenses, including interest and taxes, have been paid. It provides a comprehensive view of the company's overall profitability.

Reviewing these profitability ratios over time can reveal important trends. For instance, consistent improvement in these margins may indicate enhanced operational efficiency or stronger pricing power. Conversely, declining margins could signal rising costs or increased competition.

In the 2024 fiscal year, Dorman Products, Inc. reported the following key financial figures:

• Net sales reached $1.79 billion, marking an increase of 14.7% compared to the previous year.
• Gross profit totaled $577.1 million, or 32.2% of net sales.
• Operating income amounted to $200.6 million, which is 11.2% of net sales.
• Net income stood at $144.9 million, or $2.41 per diluted share.

The company's financial performance in 2024 showcases its ability to grow revenue and maintain profitability. The increase in net sales and gross profit highlights strong market demand and effective cost management.

Furthermore, Dorman Products, Inc. actively manages its capital allocation. In 2024, the company repurchased approximately 743,000 shares of its common stock for $75.0 million. As of December 31, 2024, $225.0 million remained available for future stock repurchases. This buyback program reflects the company's confidence in its financial position and commitment to delivering shareholder value.

Here is a summary of Dorman Products, Inc.'s financial data for the fiscal year 2024:

Analyzing Dorman Products, Inc.'s profitability in comparison to its industry peers can provide additional context. While specific industry averages can vary, comparing the company's margins to those of competitors can reveal whether it is outperforming or underperforming its peers. Further analysis can reveal the underlying factors driving these differences.

To gain more insights into the investors of Dorman Products, Inc., check out: Exploring Dorman Products, Inc. (DORM) Investor Profile: Who’s Buying and Why?

Dorman Products, Inc. (DORM) Debt vs. Equity Structure

Understanding how Dorman Products, Inc. (DORM) finances its growth involves a close look at its debt and equity structure. This analysis provides insights into the company's financial leverage, risk profile, and overall financial health. Let's delve into the specifics of Dorman's debt levels, ratios, and financing strategies.

As of the fiscal year 2024, Dorman Products, Inc. (DORM) exhibits a strategic approach to managing its debt. A review of the company's balance sheet reveals the composition of its debt, which includes both short-term and long-term obligations. While the specifics of these figures are continuously updated, it's important to note that these values reflect the company's financial strategy at a given point in time. For the most accurate and up-to-date figures, refer to Dorman Products, Inc. (DORM)'s official financial statements. The firm demonstrates adeptness in balancing debt and equity to fund operational activities and growth initiatives.

The debt-to-equity ratio is a critical metric for evaluating Dorman Products, Inc. (DORM)'s financial leverage. This ratio, calculated by dividing total debt by total equity, indicates the extent to which the company is using debt to finance its assets. A higher ratio suggests greater financial risk, as the company has a larger proportion of debt relative to equity. Conversely, a lower ratio indicates a more conservative approach to financing, with a greater reliance on equity. Dorman Products, Inc. (DORM)'s debt-to-equity ratio can be compared to industry averages to benchmark its financial leverage against its peers. The company's ratio, reflecting its capital structure decisions, provides insight into its risk management and growth strategies.

Recent activities, such as debt issuances, credit ratings, or refinancing, offer additional context. For example, a debt issuance might signal the company's intent to fund a major acquisition or expansion project. Credit ratings, assigned by rating agencies, reflect their assessment of Dorman Products, Inc. (DORM)'s creditworthiness and ability to repay its debt obligations. Refinancing activities could indicate an effort to lower borrowing costs or extend debt maturities. These activities collectively shape the company's debt profile and influence its financial flexibility.

Dorman Products, Inc. (DORM) strategically balances debt financing with equity funding to optimize its capital structure. Debt financing can provide a cost-effective source of capital, particularly when interest rates are low. However, excessive reliance on debt can increase financial risk and limit the company's ability to respond to unexpected challenges. Equity funding, on the other hand, provides a more stable source of capital but may dilute existing shareholders' ownership. Dorman Products, Inc. (DORM)'s approach to balancing debt and equity reflects its financial priorities and risk tolerance. The company's decisions in this area can have a significant impact on its long-term financial performance and shareholder value.

Here are some factors influencing Dorman Products, Inc. (DORM)'s debt vs. equity decisions:

• Market Conditions: Prevailing interest rates and investor sentiment affect the attractiveness of debt and equity financing.
• Growth Opportunities: Ambitious expansion plans may necessitate increased borrowing.
• Financial Performance: Consistent profitability and cash flow enable greater debt capacity.
• Risk Appetite: Management's comfort level with financial leverage influences funding choices.

Dorman Products, Inc. (DORM)'s debt and equity structure is a dynamic aspect of its financial strategy, continuously shaped by internal decisions and external factors. Investors should monitor these factors to gain a comprehensive understanding of the company's financial health and growth prospects.

Dorman Products, Inc. (DORM) Liquidity and Solvency

Understanding Dorman Products, Inc.'s financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations.

Liquidity Ratios:

The current and quick ratios are key indicators of a company's liquidity. These ratios provide insights into whether a company can cover its short-term liabilities with its short-term assets. Here's how to interpret them:

• Current Ratio: This ratio measures a company's ability to pay off its current liabilities with its current assets. A current ratio of 1.0 or greater is generally considered acceptable, but the ideal ratio varies by industry.
• Quick Ratio: Also known as the acid-test ratio, this is a more conservative measure than the current ratio because it excludes inventories from current assets. A quick ratio of 1.0 or higher is often preferred, indicating that a company can meet its short-term obligations even without relying on the sale of inventories.

Working Capital Trends:

Analyzing the trend of a company's working capital—the difference between its current assets and current liabilities—can reveal important insights into its operational efficiency and short-term financial health. An increasing working capital balance generally suggests improved liquidity, while a decreasing balance may signal potential challenges in meeting short-term obligations.

Cash Flow Statements Overview:

The cash flow statement provides a detailed look at all the cash inflows and outflows a company experiences during a reporting period, categorized into operating, investing, and financing activities.

• Operating Activities: This section reflects the cash generated or used from the company's core business operations. Positive cash flow from operations is a healthy sign, indicating that the company's primary activities are generating sufficient cash.
• Investing Activities: This includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). These activities can indicate the company's investment in its future growth.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. These activities show how the company is funding its operations and returning value to shareholders.

Potential Liquidity Concerns or Strengths:

A thorough analysis of these elements helps identify potential liquidity concerns or strengths. For instance, consistently positive cash flow from operations coupled with stable or increasing liquidity ratios suggests a strong liquidity position. Conversely, declining cash flow from operations and decreasing liquidity ratios may raise concerns about the company's ability to meet its short-term obligations.

For further insights, consider reading: Breaking Down Dorman Products, Inc. (DORM) Financial Health: Key Insights for Investors

Dorman Products, Inc. (DORM) Valuation Analysis

Determining whether Dorman Products, Inc. (DORM) is overvalued or undervalued involves analyzing several key financial ratios and indicators. Here's a breakdown:

Price-to-earnings (P/E) Ratio:

• As of April 2025, the trailing twelve months (TTM) P/E ratio for Dorman Products is approximately 17.7 to 18.54.
• Another source indicates a P/E ratio of 36.1 as of April 2025 (TTM).
• The forward P/E ratio is estimated at 14.43 to 14.46.
• Historically, the P/E ratio has varied, with a value of 20.9 at the end of 2022.

Price-to-book (P/B) Ratio:

• The P/B ratio for Dorman Products is around 2.60 to 2.85 as of April 2025.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

• The EV/EBITDA ratio is approximately 10.88 to 11.37 as of April 2025.
• Another source lists the EV/EBITDA ratio as 11.13.

Stock Price Trends:

• The stock price of Dorman Products was around $111.18 on April 17, 2025.
• The stock has shown a 24.19% increase over the last 12 months.
• The 52-week high is $146.60, while the 52-week low is $86.61.
• Recent analyst forecasts predict a potential upside, with an average price target of $143.50 to $153.00.

Dividend Yield and Payout Ratios:

• Dorman Products does not currently pay dividends.

Analyst Consensus:

• The consensus rating among analysts is 'Buy.'
• Out of the analysts, 2 have given a buy rating for DORM.
• The average price target from analysts suggests a potential upside of approximately 29.07% from the current price.

Dorman Products, Inc. (DORM) Risk Factors

Dorman Products, Inc. (DORM) faces a variety of risks that could impact its financial health. These risks stem from both internal and external factors, including industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors assessing the company's long-term prospects.

Here's an overview of key risks:

• Industry Competition: The automotive aftermarket is highly competitive. Dorman faces competition from established players and new entrants, all vying for market share. This competition can put pressure on pricing and margins.
• Regulatory Changes: Changes in environmental regulations, safety standards, or trade policies can significantly impact Dorman's operations and financial performance. Compliance with these regulations can be costly, and failure to comply can result in penalties.
• Market Conditions: Economic downturns, fluctuations in consumer spending, and changes in vehicle miles traveled can all affect demand for Dorman's products. A decrease in demand can lead to lower sales and profitability.

Dorman Products, Inc. faces several operational, financial, and strategic risks. These are often detailed in their annual 10-K filings with the Securities and Exchange Commission (SEC). These filings provide insights into management's perspective on the most significant challenges facing the company.

Examples of risks from recent filings might include:

• Supply Chain Disruptions: Disruptions to the global supply chain can impact Dorman's ability to source products and meet customer demand. This can lead to increased costs and decreased sales.
• Inventory Management: Effectively managing inventory is crucial for Dorman's profitability. Excess inventory can lead to obsolescence and markdowns, while insufficient inventory can result in lost sales.
• Product Development: Dorman's success depends on its ability to develop and introduce new products that meet the evolving needs of the automotive aftermarket. Failure to innovate can lead to a loss of market share.

Mitigation strategies and plans, if available, are also outlined in the company's filings and earnings reports. These strategies may include:

• Diversifying the supply chain to reduce reliance on any single supplier or region.
• Investing in technology and processes to improve inventory management.
• Increasing investment in research and development to drive product innovation.

Understanding these risks and mitigation strategies is essential for investors seeking to make informed decisions about Dorman Products, Inc. (DORM). You can also learn more about the company's values here: Mission Statement, Vision, & Core Values of Dorman Products, Inc. (DORM).

Dorman Products, Inc. (DORM) Growth Opportunities

Dorman Products, Inc. (DORM) is strategically positioned for future growth through several key drivers. These include product innovations, market expansions, strategic acquisitions, and key partnerships. These elements collectively enhance Dorman's competitive stance and potential for increased revenue and earnings.

Product innovation remains a cornerstone of Dorman's growth strategy. The company consistently introduces new and innovative products, expanding its offerings and addressing evolving customer needs. This commitment to innovation not only strengthens its market position but also drives revenue growth. For instance, Dorman's focus on developing parts for newer vehicle models ensures they stay relevant in a rapidly changing automotive landscape. This proactive approach helps maintain a competitive edge and capture emerging market opportunities.

Market expansion, both domestically and internationally, presents significant growth avenues for Dorman. By extending its reach into new geographic regions, Dorman taps into previously unaccessed customer bases. These expansions increase sales volumes and diversify revenue streams, reducing reliance on any single market. Dorman Products capitalizes on strategic acquisitions to broaden its product lines and market presence. These acquisitions often bring new technologies, capabilities, or access to different market segments, accelerating growth and enhancing overall competitiveness. This strategy allows Dorman to quickly integrate valuable assets and expertise, driving synergistic benefits and improving market penetration.

Strategic initiatives and partnerships are also integral to Dorman's growth prospects. Collaborations with other companies can provide access to new technologies, distribution channels, or markets. These partnerships enhance Dorman's capabilities and expand its reach, fostering innovation and driving growth. Dorman's competitive advantages further solidify its growth trajectory. These advantages, such as a strong brand reputation, extensive distribution network, and efficient supply chain, create barriers to entry for competitors. These strengths enable Dorman to maintain its market position, capture market share, and drive sustainable growth.

Future revenue growth projections and earnings estimates reflect analysts' confidence in Dorman's growth prospects. While specific forecasts vary, the general consensus points towards continued revenue and earnings growth in the coming years. These projections are based on factors such as the company's growth strategies, market trends, and competitive positioning. Below is a table summarizing key financial estimates and growth expectations for Dorman Products, Inc.

For additional insights into Dorman Products, Inc.'s financial health, you can explore: Breaking Down Dorman Products, Inc. (DORM) Financial Health: Key Insights for Investors