Latest news with #DORM
Yahoo
14-05-2025
- Automotive
- Yahoo
Are Auto-Tires-Trucks Stocks Lagging Dorman Products (DORM) This Year?
For those looking to find strong Auto-Tires-Trucks stocks, it is prudent to search for companies in the group that are outperforming their peers. Dorman Products (DORM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Auto-Tires-Trucks sector should help us answer this question. Dorman Products is one of 103 individual stocks in the Auto-Tires-Trucks sector. Collectively, these companies sit at #14 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Dorman Products is currently sporting a Zacks Rank of #2 (Buy). The Zacks Consensus Estimate for DORM's full-year earnings has moved 3.8% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend. Our latest available data shows that DORM has returned about 1.1% since the start of the calendar year. Meanwhile, the Auto-Tires-Trucks sector has returned an average of -10.2% on a year-to-date basis. This means that Dorman Products is outperforming the sector as a whole this year. Another stock in the Auto-Tires-Trucks sector, Ferrari (RACE), has outperformed the sector so far this year. The stock's year-to-date return is 15.6%. In Ferrari's case, the consensus EPS estimate for the current year increased 9.9% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy). Breaking things down more, Dorman Products is a member of the Automotive - Replacement Parts industry, which includes 7 individual companies and currently sits at #66 in the Zacks Industry Rank. Stocks in this group have gained about 6.5% so far this year, so DORM is slightly underperforming its industry this group in terms of year-to-date returns. In contrast, Ferrari falls under the Automotive - Original Equipment industry. Currently, this industry has 53 stocks and is ranked #144. Since the beginning of the year, the industry has moved +2.5%. Investors with an interest in Auto-Tires-Trucks stocks should continue to track Dorman Products and Ferrari. These stocks will be looking to continue their solid performance. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dorman Products, Inc. (DORM) : Free Stock Analysis Report Ferrari N.V. (RACE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
11-04-2025
- Business
- Yahoo
Are Investors Undervaluing Dorman Products, Inc. (NASDAQ:DORM) By 31%?
Using the 2 Stage Free Cash Flow to Equity, Dorman Products fair value estimate is US$165 Dorman Products' US$114 share price signals that it might be 31% undervalued Analyst price target for DORM is US$145 which is 13% below our fair value estimate Today we will run through one way of estimating the intrinsic value of Dorman Products, Inc. (NASDAQ:DORM) by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$203.6m US$217.1m US$229.0m US$239.6m US$249.3m US$258.5m US$267.3m US$275.9m US$284.3m US$292.8m Growth Rate Estimate Source Est @ 8.27% Est @ 6.61% Est @ 5.45% Est @ 4.64% Est @ 4.07% Est @ 3.68% Est @ 3.40% Est @ 3.20% Est @ 3.07% Est @ 2.97% Present Value ($, Millions) Discounted @ 7.2% US$190 US$189 US$186 US$181 US$176 US$170 US$164 US$158 US$152 US$146 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$1.7b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.8%. We discount the terminal cash flows to today's value at a cost of equity of 7.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$293m× (1 + 2.8%) ÷ (7.2%– 2.8%) = US$6.7b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$6.7b÷ ( 1 + 7.2%)10= US$3.3b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$5.1b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$114, the company appears quite undervalued at a 31% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Dorman Products as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.2%, which is based on a levered beta of 1.033. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Dorman Products Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness No major weaknesses identified for DORM. Opportunity Annual earnings are forecast to grow for the next 2 years. Trading below our estimate of fair value by more than 20%. Threat Annual earnings are forecast to grow slower than the American market. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For Dorman Products, we've put together three relevant aspects you should further examine: Risks: We feel that you should assess the 1 warning sign for Dorman Products we've flagged before making an investment in the company. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for DORM's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGS every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
17-03-2025
- Business
- Yahoo
Dorman Products, Inc.'s (NASDAQ:DORM) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
Dorman Products (NASDAQ:DORM) has had a rough three months with its share price down 4.9%. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Dorman Products' ROE today. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for Dorman Products ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Dorman Products is: 15% = US$190m ÷ US$1.3b (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.15 in profit. So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. To start with, Dorman Products' ROE looks acceptable. Further, the company's ROE compares quite favorably to the industry average of 11%. This certainly adds some context to Dorman Products' decent 12% net income growth seen over the past five years. We then performed a comparison between Dorman Products' net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 12% in the same 5-year period. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Has the market priced in the future outlook for DORM? You can find out in our latest intrinsic value infographic research report. Given that Dorman Products doesn't pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business. On the whole, we feel that Dorman Products' performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. We also studied the latest analyst forecasts and found that the company's earnings growth is expected be similar to its current growth rate. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
20-02-2025
- Business
- Yahoo
Is It Too Late To Consider Buying Dorman Products, Inc. (NASDAQ:DORM)?
While Dorman Products, Inc. (NASDAQ:DORM) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$143 at one point, and dropping to the lows of US$122. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Dorman Products' current trading price of US$126 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Dorman Products's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Dorman Products According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. We've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 20.72x is currently trading slightly above its industry peers' ratio of 18.83x, which means if you buy Dorman Products today, you'd be paying a relatively sensible price for it. And if you believe that Dorman Products should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, Dorman Products's share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward. Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With profit expected to grow by 26% over the next couple of years, the future seems bright for Dorman Products. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. Are you a shareholder? It seems like the market has already priced in DORM's positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at DORM? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio? Are you a potential investor? If you've been keeping an eye on DORM, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for DORM, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. If you want to dive deeper into Dorman Products, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Dorman Products and we think they deserve your attention. If you are no longer interested in Dorman Products, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
