Mar. 2 at 3:05 PM
$DXPE Q4’25: the headline was clean; sales grew +12% y/y and beat consensus by
$28.4M. The mix keeps improving; IPS ran an 18.0% operating margin and Service Centers 13.9%. The balance sheet also moved the right way; DXPE refinanced Term Loan B, raised
$205M, cut borrowing costs by 50 bps (SOFR+325), and ended 2025 with
$543M net debt and 2.3x net debt/EBITDA.
So why the market hesitates? Two things: energy backlog fell another 9.3% q/q (two straight declines), and SCS stays soft (12.5% of revenue; -1.4% in 2025). I’m not panicking; backlog is still 36.9% above 2024, and the CFO’s monthly sales trend color looked normal.
I updated my sum-of-parts; fair value
$156 →
$210/share.
https://www.beatingthetide.com/p/weekly-71-dxpes-water-segment-is