Roth Capital Keeps Buy Rating on Dorman with Raised PT to $182

Roth Capital Keeps Buy Rating on Dorman with Raised PT to $182

Roth Capital Partners has maintained its "Buy" rating on Dorman Products (DORM) but has raised its price target to $182 from $175. The investment bank's analysts remain bullish on the company's prospects, highlighting strong revenue growth and high gross margins. Dorman Products, a supplier of original equipment parts for automobiles, generates most of its revenue from the United States and operates through three business segments: Light Duty, Heavy Duty, and Specialty Vehicle.

The analysts at Roth Capital Partners have cited several key factors supporting their optimistic view. First, the company has shown strong revenue growth, with a 7.56% increase over the past three months ending June 30, 2025, reflecting a substantial increase in top-line earnings [1]. Additionally, Dorman Products maintains a high gross margin of 40.58%, indicating strong cost management and profitability compared to its peers [1]. The company's earnings per share (EPS) is also a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 1.92 [1].

From a technical perspective, Dorman Products has reached a significant support level. Recently, the company's 50-day simple moving average broke out above its 200-day moving average, forming a "golden cross." This technical chart pattern is considered an important signifier for a bullish breakout, indicating a positive trend reversal [2]. Over the past four weeks, Dorman Products has gained 25.7%, and it currently sits at a #2 (Buy) on the Zacks Rank, further solidifying its bullish case [2].

However, investors should also consider the company's valuation metrics. The Price to Earnings (P/E) ratio of 20.77 is lower than the industry average, implying a discounted valuation for Dorman Products' stock. Conversely, the Price to Sales (P/S) ratio of 2.25 is higher than the industry average, suggesting that the stock may be overvalued in relation to sales performance [1].

In conclusion, Roth Capital Partners' initiation of coverage on Dorman Products with a "Buy" rating and a raised price target of $182 reflects the investment bank's optimism about the company's prospects. The strong revenue growth, high gross margin, positive EPS, and bullish technical indicators support this view. However, investors should also consider the company's valuation metrics and make informed decisions based on their own risk tolerance and investment objectives.

References:
[1] https://www.benzinga.com/insights/news/25/08/47211911/donna-long-exercises-options-realizes-54k
[2] https://www.nasdaq.com/articles/should-you-buy-dorman-products-dorm-after-golden-cross