Bullish case
$175 to $215
More likely if gross margin recovers toward 40%, EPS moves above $10, free cash flow normalizes, and the market re-rates toward 18 to 20x forward earnings.
Dorman Products, Inc. research snapshot
DORM AI Stock Analysis
DORM AI stock analysis reads Dorman Products as a durable aftermarket auto parts business with a broad replacement parts catalog, steady mid single digit revenue growth, and a reasonable forward valuation, but with fresh gross margin pressure and an earnings event the same day as this data cutoff. At the August 3, 2026 cutoff, DORM traded near $129.73 with a verified market capitalization of about $3.88 billion, calculated as $129.73 times 29.88 million shares. The main question now is whether the gross margin drop to 36.0% in Q1 2026 is temporary or the start of a reset, and how management explains margins, inventory, and free cash flow in the Q2 2026 report scheduled after the close on August 3, 2026. This is informational research and not investment advice.
Current price
$129.73
Market cap
$3.88 billion
AI score
58 / 100
Rating
Established aftermarket auto parts business with fair forward valuation but fresh gross margin pressure
Trend status
Below the 50 day moving average, above the 200 day moving average, mid way down the 52 week range
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
Research quality check
- information Richness
- B-level information richness. Dorman has a long operating history, is covered by about 8 sell-side analysts, and files complete SEC reports, with liquid NASDAQ market data. Secondary sources are more limited than for mega-cap auto suppliers, so forward margin assumptions carry more uncertainty than the filing-backed history.
- bias Check
- The main AI bias risk is overextrapolating the margin improvement cycle from FY2022 to FY2025 and underweighting the Q1 2026 gross margin drop to 36.0%. This page separates filing-backed history from forward scenario judgment and flags the same-day earnings report as a source of near-term price risk.
- ai Confidence
- Medium-high data confidence
- investment Certainty
- Medium. Dorman operates in a fragmented, recession-resistant aftermarket industry, but gross margin just compressed sharply, free cash flow is still recovering after a heavy inventory build, the stock carries about 6% short interest, and Q2 2026 results are due the same day as this page.
Quick verdict table
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Dorman identifies failure-prone vehicle parts and develops aftermarket replacement products. Revenue has grown from $1.73 billion in FY2022 to $2.13 billion in FY2025, but Q1 2026 gross margin fell to 36.0% from 40.9% a year earlier, signaling margin pressure that offsets some of the scale benefit. | High |
| Moat | The moat comes from product breadth, reverse engineering capability, distribution relationships, and brand recognition among mechanics. Barriers are moderate because competitors can reverse engineer similar parts and private label competition limits pricing power. | Medium |
| Management | Management executed an acquisition-led strategy (Dayton Parts, SuperATV) and expanded gross margin from 32.6% in FY2022 to 42.1% in FY2025. The Q1 2026 gross margin drop and the large FY2025 inventory build are execution points to monitor, and the Q2 2026 report is a key test. | Medium-high |
| Financial trend | Revenue grew at about 7% CAGR from FY2022 to FY2025, and net income rose from $121.5 million to $204.2 million. Free cash flow was $75.7 million in FY2025, held back by a roughly $250 million inventory build, but Q1 2026 free cash flow improved to $35.3 million as inventory started to draw down. | High |
| Valuation | At $129.73, DORM trades near 21x trailing EPS and about 14 to 15x forward EPS, with a price-to-book of about 2.73x and EV/EBITDA near 13x. The forward multiple is below its historical average and below the analyst mean target of about $154. | Medium |
| Technical trend | DORM is below the 50 day moving average near $131.6 but above the 200 day average near $124.7, with RSI near 43. The stock is about 22% below its 52 week high of $166.89 and about 32% above its 52 week low of $98.44. | Medium-high |
| Risk level | Key risks are the Q2 2026 earnings report scheduled for August 3, 2026 after market close, gross margin compression, inventory and working capital swings, integration of past acquisitions, automotive cycle sensitivity, raw material costs, and customer concentration. | Medium-high |
| AI confidence | High confidence for price, market cap, share count, financial filings, balance sheet, and analyst data because multiple sources align. Lower confidence for forward growth and margin recovery timing. | Medium-high data confidence |
| Investment certainty | Medium certainty. Dorman is a durable aftermarket business with a manageable debt load, but the recent margin compression and the same-day earnings report make the near-term path uncertain. Short interest near 6% of shares outstanding and 95 to 97% institutional ownership show a well-covered stock. | Medium |
DORM AI stock forecast
DORM AI Stock Forecast Scenarios
The DORM AI stock forecast uses scenario ranges around the $129.73 cutoff price and does not claim a certain future price. The bullish case requires gross margin to recover toward 40%, revenue to keep growing at a mid single digit rate, and free cash flow to normalize as inventory falls. The base case assumes steady mid single digit growth with margins stabilizing near current levels. The bearish case assumes margin compression continues, inventory or integration problems appear, or the multiple compresses. Dorman reports Q2 2026 results after the close on August 3, 2026, which can move these scenarios quickly.
Base case
$128 to $160
More likely if revenue grows 4 to 6%, gross margin stabilizes near 37 to 39%, EPS reaches $9 to $9.5, and the stock trades near 14 to 16x forward earnings, consistent with the analyst mean target near $154.
Bearish case
$80 to $100
More likely if margin compression persists, EPS stays below $7, inventory or acquisition issues emerge, or the valuation compresses toward 12 to 13x earnings.
DORM AI technical analysis
DORM AI Technical Analysis
DORM AI technical analysis starts from the $129.73 intraday price and the $133.16 July 31 close used for this August 3, 2026 static page. The stock trades below the 50 day moving average near $131.6 but above the 200 day average near $124.7, with RSI near 43 and MACD slightly positive but below its signal. Because this page does not fetch request-time market data, traders should confirm levels on a live chart before acting.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $129.73 | Intraday level on August 3, 2026. The last verified close was $133.16 on July 31, 2026. |
| Near support | $124.70 to $126 | The 200 day moving average zone near $124.7. DORM has held above this level during the recent pullback. |
| Secondary support | $120 to $121 | The 100 day moving average zone. A break below this area would point toward the $112 to $115 zone. |
| 52-week low | $98.44 | The 52 week low reached in 2025. A sustained break below the support cluster near $120 would put this zone back in play. |
| Near resistance | $131.60 to $137 | The 50 day and 20 day moving average zone. DORM must reclaim this band to rebuild the uptrend. |
| Secondary resistance | $141 to $146 | The July 2026 high zone. A sustained close above this band would signal renewed upside momentum. |
| 52-week high | $166.89 | The 52 week high. A move through this level would confirm a strong trend continuation. |
| Moving averages | 50-day near $131.6, 200-day near $124.7 | The 50 day average sits just above the current price while the 200 day average provides support below. |
| Momentum | RSI near 43, MACD below signal | RSI is neutral and MACD is slightly positive but below its signal line, showing weak momentum into the earnings report. |
| Volume | About 250K to 300K shares daily | Average volume is modest, so significant price moves may require confirmation through multiple sessions. |
| Volatility | Beta 0.97, moderate moves | Beta near 1.0 means DORM tends to move in line with the broader market. Earnings days can still produce outsized single session swings. |
| Invalidation | Close below $124.70, then $120 | A close below the 200 day moving average weakens the medium-term setup. A sustained break below $120 would challenge the recovery trend. |
DORM AI trading strategy
DORM AI Trading Strategy Framework
The DORM AI trading strategy is a rules-based research framework, not personalized advice. It combines filing-backed business evidence, technical confirmation, position sizing, and clear invalidation levels, and it should be revisited after the Q2 2026 report scheduled for August 3, 2026.
Trend-following setup
Look for DORM to reclaim and hold the $131.6 to $137 area on rising volume after the August 3 earnings report, then extend toward $141 to $146. A move through the 52 week high zone near $167 would confirm a strong uptrend.
A close back below the 200 day average near $124.7 or a post-earnings breakdown should reduce confidence in the long setup.
Mean-reversion / support setup
If DORM pulls back toward the $124.7 to $121 support band on light volume and without a fundamental thesis break, the area could offer a better risk-reward entry, especially after the earnings reaction settles.
Avoid catching a falling knife if the stock breaks below $120 on heavy volume or if gross margin falls again in Q2 2026. Define maximum loss as a percentage of position size, not conviction.
Fundamental monitor
Track Q2 2026 results reported August 3, 2026, gross and operating margin trends, inventory turns, free cash flow conversion, debt levels, and management guidance on acquisitions and capital allocation.
Lower the rating if gross margin keeps falling, revenue growth decelerates below inflation, or free cash flow stays weak.
Investment research summary
Four-master Research Compression
Business essence
Dorman Products identifies commonly failing vehicle parts and engineers aftermarket replacement products, selling to auto parts distributors and retailers across North America.
Moat
The moat is built on product breadth (tens of thousands of SKUs), reverse engineering capability, distribution relationships with major auto parts chains, and a brand trusted by mechanics. However, competitors can reverse engineer parts too, which limits pricing power.
Munger risk inversion
The thesis can fail if the gross margin compression seen in Q1 2026 continues, if the large inventory build from FY2025 turns into writedowns, if SuperATV and Dayton Parts acquisitions underperform, or if private label competition erodes pricing.
Management
Management has executed an acquisition-led growth and margin improvement strategy, lifting gross margin from 32.6% in FY2022 to 42.1% in FY2025. The Q1 2026 drop to 36.0%, the FY2025 inventory build, and the outcome of the Q2 2026 report are the key execution tests.
Industry trend
The US automotive aftermarket benefits from an aging vehicle fleet, with average vehicle age over 12 years, providing steady demand for replacement parts. The shift toward electric vehicles and longer-lived components could change the parts mix over the long term.
Valuation and margin of safety
At about 21x trailing and 14 to 15x forward EPS, DORM is priced for a moderate recovery. The analyst mean target near $154 implies upside from the $129.73 cutoff price. Margin of safety depends on whether margins stabilize and free cash flow normalizes.
Source-backed data
DORM Data Table
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| DORM price | $129.73 intraday on August 3, 2026; last close $133.16 on July 31, 2026 | Google Finance quote snapshot and yfinance quote | August 3, 2026 |
| Market capitalization | $3.88 billion, verified as $129.73 x 29.88 million shares | Google Finance and yfinance, cross-checked with financial_rigor.py market cap check | August 3, 2026 |
| Shares outstanding | 29.88 million | Google Finance and StockAnalysis statistics | August 3, 2026 |
| Earnings per share (TTM) | $6.20, trailing PE about 21x | yfinance quote and StockAnalysis statistics | August 3, 2026 |
| Forward EPS and P/E | Forward EPS about $9.39, forward PE about 14 to 15x | yfinance quote data | August 3, 2026 |
| FY2025 total revenue | $2,130.3 million, up from $2,009.2 million in FY2024 | Yahoo Finance annual income statement | August 3, 2026 |
| FY2025 net income and EPS | Net income $204.2 million, diluted EPS $6.60 | Yahoo Finance annual income statement | August 3, 2026 |
| Q1 2026 results | Revenue $528.8 million, up 4.2%; net income $43.6 million; EPS $1.40; gross margin 36.0% | Yahoo Finance quarterly income statement | August 3, 2026 |
| Cash and equivalents | $43.1 million at March 31, 2026 | Yahoo Finance quarterly balance sheet | August 3, 2026 |
| Total debt | $548.2 million at March 31, 2026; net debt about $505 million | Yahoo Finance quarterly balance sheet | August 3, 2026 |
| Free cash flow | About $70.7 million TTM; $75.7 million in FY2025; $35.3 million in Q1 2026 | Yahoo Finance cash flow statement and StockAnalysis statistics | August 3, 2026 |
| 52-week range | $98.44 low to $166.89 high | Google Finance and StockAnalysis | August 3, 2026 |
| Moving averages and momentum | 50-day MA near $131.6, 200-day MA near $124.7, RSI near 43 | StockAnalysis statistics | August 3, 2026 |
| Analyst consensus | Strong Buy, mean target about $154.13, range $140 to $170, 8 analysts | StockAnalysis statistics and Google Finance analyst data | August 3, 2026 |
| Short interest | 1.81 million shares, about 6.06% of shares outstanding, short ratio 5.59 days | StockAnalysis statistics | August 3, 2026 |
| Q2 2026 earnings date | August 3, 2026 after market close; EPS estimate about $1.89 | StockAnalysis statistics and Google Finance earnings data | August 3, 2026 |
Frequently Asked Questions
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This DORM AI stock analysis is an informational tool for research and education only. It is not investment advice, a recommendation, or a guarantee of future performance. Forecast ranges are scenarios based on available data as of August 3, 2026 and can be wrong.
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