Dorman Products, Inc. (DORM) | Investment Case

1. Company Snapshot

1.a. Company Description

Dorman Products, Inc.supplies replacement parts and fasteners for passenger cars, light trucks, and medium- and heavy-duty trucks in the automotive aftermarket industry worldwide.It offers original equipment dealer products, such as intake and exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and oil drain plugs, and wheel bolts and lug nuts.

The company also provides automotive replacement parts, including door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles, such as lighting, cooling, engine management, wheel hardware, air tanks, and cab products.It offers powertrain products comprising cooling products, harmonic balancers, fluid lines and reservoirs, connectors, 4-wheel drive components, other engine, and transmission and axle components; and chassis products, such as control arms, ball joints, tie-rod ends, brake hardware and hydraulics, axle hardware, suspension arms, knuckles, links, bushings, leaf springs, other suspension, steering, and brake components.The company also provides automotive body products, including window lift motors, switches and handles, wiper, and other interior and exterior automotive body components; and hardware products comprising threaded bolts; automotive and home electrical wiring components; and other hardware assortments and merchandise.

It offers its products under the OE Solutions, HELP!, OE FIX, Conduct-Tite, and HD Solutions brands through automotive aftermarket retailers, such as on-line platforms; national, regional, and local warehouse distributors; and specialty markets; salvage yards; local independent parts wholesalers; and mass merchants.The company was founded in 1918 and is headquartered in Colmar, Pennsylvania.

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1.b. Last Insights on DORM

Dorman Products' recent performance was positively driven by strong quarterly earnings, beating estimates with Q2 and Q3 EPS of $2.06 and $2.62, respectively. The company's upgraded Strong Buy rating by Zacks reflects growing optimism about its earnings prospects. Additionally, Envestnet Portfolio Solutions Inc. increased its stake in Dorman Products by 28.3%. The company's guidance for FY 2025 EPS of $8.600-8.900 also supports growth expectations. Institutional investor interest and earnings beats have contributed to the positive momentum. (Source: Zacks)

1.c. Company Highlights

Last Price	125.74
Change Percentage	-0.49%
Open	126.59
Previous Close	126.36
Market Cap ( Millions)	3843
Volume	66795
Year High	166.89
Year Low	106.95
M A 50	139.7
M A 200	133.15

FCF Yield	2.75%
Dividend Yield	0.00%
ROE	18.57%
Debt / Equity	44.28%
Net Debt / EBIDTA	123.90%
Price To Book	2.97
Price Earnings Ratio	15.52
Price To FCF	36.4
Price To sales	1.8
EV / EBITDA	10.46

2. Dorman Products Delivers Strong Q3 2025 Earnings

Dorman Products reported a robust financial performance in Q3 2025, with consolidated net sales increasing 7.9% year-over-year to $544 million, primarily driven by tariff-related pricing actions. The company's adjusted gross margin expanded 390 basis points to 44.4%, while adjusted SG&A expense as a percentage of net sales rose 50 basis points to 23.9%. The company's earnings per share (EPS) came in at $2.62, beating analyst estimates of $2.31. The strong top-line growth and margin expansion were key drivers of the earnings beat.

Publication Date: Nov -02

                                    📋 Highlights
                                    Q3 Net Sales Growth::
                                                Consolidated net sales rose 7.9% YoY to $544M, driven by tariff-related pricing actions.
Light Duty Segment Performance::
                                                Achieved 9.3% YoY sales growth, with strong POS and new product contributions.
Gross Margin Expansion::
                                                Adjusted gross margin improved 390 bps to 44.4%, reflecting effective cost management.
2024 Guidance::
                                                Projected 7–9% sales growth and 21–25% adjusted EPS increase over 2024.

                                

Segment Performance

The Light Duty business was a significant contributor to the company's growth, with net sales increasing 9% year-over-year. According to Kevin Olsen, CEO, "New products continue to drive exceptional growth there." The company's nondiscretionary repair parts portfolio has been a key factor in its success, as it tends to perform well during periods of inflation.

Outlook and Guidance

Dorman Products expects net sales growth to be in the range of 7% to 9% over 2024, with adjusted diluted EPS expected to increase 21% to 25% compared to last year. Analysts estimate next year's revenue growth at 5.1%, which is lower than the current year's growth rate. The company's guidance suggests that it is confident in its ability to continue delivering strong financial performance.

Valuation

Using the current valuation metrics, Dorman Products has a P/E Ratio of 18.11, P/B Ratio of 3.16, and P/S Ratio of 1.96. The company's EV/EBITDA ratio is 11.81, indicating a reasonable valuation. The ROE of 16.98% and ROIC of 13.06% suggest that the company is generating strong returns on its equity and invested capital. With a Net Debt / EBITDA ratio of 1.32, the company's debt profile appears manageable.

3. NewsRoom

3 Auto Replacement Parts Stocks to Benefit From Aging Fleet

Nov -19

Source: zacks.com

State of New Jersey Common Pension Fund D Cuts Stock Holdings in Dorman Products, Inc. $DORM

Nov -02

Source: defenseworld.net

Dorman Products (DORM) Beats Q3 Earnings and Revenue Estimates

Oct -27

Source: zacks.com

Envestnet Portfolio Solutions Inc. Buys 1,038 Shares of Dorman Products, Inc. $DORM

Oct -22

Source: defenseworld.net

Dorman Products (DORM) Expected to Announce Quarterly Earnings on Monday

Oct -20

Source: defenseworld.net

US Bancorp DE Cuts Holdings in Dorman Products, Inc. $DORM

Oct -19

Source: defenseworld.net

Dorman Products, Inc. Announces Date to Report Third Quarter 2025 Financial Results

Oct -06

Source: globenewswire.com

Dorman Products (DORM) Upgraded to Strong Buy: Here's Why

Oct -03

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.82%)

6. Segments

Light Duty

Expected Growth: 3.8%

Dorman Products' Light Duty segment growth of 3.8% is driven by increasing demand for automotive repair and maintenance, fueled by an aging vehicle fleet and rising miles driven. Additionally, the company's focus on innovation, expanded product offerings, and strategic partnerships contribute to its growth momentum.

Heavy Duty

Expected Growth: 4.2%

Dorman Products' Heavy Duty segment growth of 4.2% is driven by increasing demand for aftermarket parts, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, quality, and customer satisfaction has led to market share gains. Furthermore, the growing average age of vehicles on the road and the need for replacement parts also contribute to the segment's growth.

Specialty Vehicle

Expected Growth: 3.5%

Dorman Products' Specialty Vehicle segment growth of 3.5% is driven by increasing demand for high-performance and specialty vehicles, rising aftermarket sales, and expanding product offerings in the commercial vehicle market. Additionally, the company's strategic acquisitions and partnerships have enhanced its product portfolio and distribution network, further fueling growth.

7. Detailed Products

Replacement Parts

Dorman Products offers a wide range of replacement parts for vehicles, including brake pads, rotors, and wheel bearings.

OE Solutions

Dorman's OE Solutions provide original equipment quality parts for various vehicle systems, including steering, suspension, and engine components.

Aftermarket Parts

Dorman's aftermarket parts offer a cost-effective alternative to OEM parts, covering a broad range of vehicle systems and components.

Heavy Duty Products

Dorman's heavy-duty products cater to the needs of commercial vehicles, including trucks, buses, and trailers.

Automotive Hardware

Dorman's automotive hardware includes a variety of fasteners, clips, and other components for vehicle repair and maintenance.

Tools and Equipment

Dorman's tools and equipment are designed to simplify vehicle repair and maintenance tasks, including diagnostic tools and testing equipment.

8. Dorman Products, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dorman Products, Inc. operates in the automotive aftermarket industry, which has a moderate threat of substitutes. While there are some substitutes available, they are not a significant threat to the company's business.

Bargaining Power Of Customers

Dorman Products, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often critical to the operation of vehicles, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Dorman Products, Inc. relies on a network of suppliers for raw materials and components. While the company has some bargaining power due to its size, suppliers also have some leverage due to the specialized nature of the products.

Threat Of New Entrants

The automotive aftermarket industry has significant barriers to entry, including high capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established companies like Dorman Products, Inc.

Intensity Of Rivalry

The automotive aftermarket industry is highly competitive, with many established players competing for market share. Dorman Products, Inc. faces intense competition from companies like AutoZone, O'Reilly Automotive, and Advance Auto Parts.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	33.65%
Debt Cost	8.09%
Equity Weight	66.35%
Equity Cost	8.09%
WACC	8.09%
Leverage	50.72%

11. Quality Control: Dorman Products, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Visteon

A-Score: 6.1/10

Value: 7.6

Growth: 7.3

Quality: 7.1

Yield: 0.0

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

Lear

A-Score: 5.6/10

Value: 7.9

Growth: 5.1

Quality: 4.1

Yield: 5.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

Dorman Products

A-Score: 5.6/10

Value: 3.7

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

LKQ

A-Score: 5.4/10

Value: 7.4

Growth: 5.4

Quality: 4.9

Yield: 6.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

Gentex

A-Score: 5.4/10

Value: 7.3

Growth: 5.6

Quality: 5.4

Yield: 3.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

BorgWarner

A-Score: 5.2/10

Value: 5.3

Growth: 3.7

Quality: 4.5

Yield: 2.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.41%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.09%

Dorman Products, Inc. - US2582781009

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DORM

1.c. Company Highlights

Average Quality

Average Yield

Average Growth

Earnings Beats

Fairly Valued

Medium Volatility

Strong Momentum

Revenues Miss

Better Quality

Less Volatile

Revenues Beats

Higher Growth

Stable Momentum

Expensive

2. Dorman Products Delivers Strong Q3 2025 Earnings

Segment Performance

Outlook and Guidance

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.82%)

6. Segments

Light Duty

Expected Growth: 3.8%

Heavy Duty

Expected Growth: 4.2%

Specialty Vehicle

Expected Growth: 3.5%

7. Detailed Products

Replacement Parts

OE Solutions

Aftermarket Parts

Heavy Duty Products

Automotive Hardware

Tools and Equipment

8. Dorman Products, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Dorman Products, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

125.74$

Current Price

125.74$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA