We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dorman Products (DORM - Free Report) supplies replacement and upgrade parts for passenger cars, light trucks, and medium- and heavy-duty trucks in the automotive market. The company offers powertrain products including intake and exhaust manifolds, fluid lines, drain plugs, transmission and axle components, and other suspension, steering and brake mechanisms.
In addition, Dorman Products provides other motor vehicle parts such as door handles and hinges, window lift motors, lighting and electrical components, and windshield wiper assemblies. The company offers its products under brands such as Dorman, Dayton Parts, SuperATV, Keller Performance Products, and Gboost through retail stores, online websites, dealers, and warehouse distributors.
The Zacks Rundown
DORM stock is a Zacks Rank #5 (Strong Sell) and is part of the Zacks Automotive – Replacement Parts industry group, which ranks in the bottom 14% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the course of the year:
Image Source: Zacks Investment Research
Candidates in the bottom tiers of industries can often be potential short candidates. While individual stocks have the ability to outperform even when included in a poorly-performing industry group, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Adding to the underperformance this year, stocks in this group are experiencing negative earnings growth:
Image Source: Zacks Investment Research
As a part of this group, DORM stock has experienced considerable volatility in 2023; shares recently touched a 52-week low.
Recent Earnings Misses and Deteriorating Outlook
Dorman Products has fallen short of earnings estimates in three of the past four quarters. The auto parts company most recently reported third-quarter earnings back in October of $1.40/share, missing the $1.60/share consensus EPS estimate by 12.5%.
The company has missed earnings estimates by an average of 13.95% over the past four quarters. Consistently falling short of earnings estimates is a recipe for underperformance, and DORM is no exception.
Dorman Products has been on the receiving end of negative earnings estimate revisions as of late. For the current fiscal year, analysts have decreased estimates by 15.12% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $4.38/share, translating to negative growth of -7.98% relative to last year.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, DORM stock is in a sustained downtrend. Notice how shares have plunged below both the 50-day and 200-day moving averages signaled by the blue and red lines, respectively. The stock is making a series of lower lows, with no respite from the selling in sight. Also note how both moving averages have rolled over and are sloping down – another good sign for the bears.
Image Source: StockCharts
While not the most accurate indicator, DORM stock has also experienced what is known as a ‘death cross’, wherein the stock’s 50-day moving average crosses below its 200-day moving average. DORM would have to make a stern move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock. Shares have fallen nearly 20% in the past year alone and have failed to participate in this year’s rally.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to hit new highs anytime soon. The fact that DORM is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
DORM shares continue to experience substantial volatility and have widely underperformed this year. A recent uptick is providing bearish investors with an appealing entry point. Bulls should avoid this stock as there are plenty of better alternatives in the current market environment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bear of the Day: Dorman Products (DORM)
Dorman Products (DORM - Free Report) supplies replacement and upgrade parts for passenger cars, light trucks, and medium- and heavy-duty trucks in the automotive market. The company offers powertrain products including intake and exhaust manifolds, fluid lines, drain plugs, transmission and axle components, and other suspension, steering and brake mechanisms.
In addition, Dorman Products provides other motor vehicle parts such as door handles and hinges, window lift motors, lighting and electrical components, and windshield wiper assemblies. The company offers its products under brands such as Dorman, Dayton Parts, SuperATV, Keller Performance Products, and Gboost through retail stores, online websites, dealers, and warehouse distributors.
The Zacks Rundown
DORM stock is a Zacks Rank #5 (Strong Sell) and is part of the Zacks Automotive – Replacement Parts industry group, which ranks in the bottom 14% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the course of the year:
Image Source: Zacks Investment Research
Candidates in the bottom tiers of industries can often be potential short candidates. While individual stocks have the ability to outperform even when included in a poorly-performing industry group, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Adding to the underperformance this year, stocks in this group are experiencing negative earnings growth:
Image Source: Zacks Investment Research
As a part of this group, DORM stock has experienced considerable volatility in 2023; shares recently touched a 52-week low.
Recent Earnings Misses and Deteriorating Outlook
Dorman Products has fallen short of earnings estimates in three of the past four quarters. The auto parts company most recently reported third-quarter earnings back in October of $1.40/share, missing the $1.60/share consensus EPS estimate by 12.5%.
The company has missed earnings estimates by an average of 13.95% over the past four quarters. Consistently falling short of earnings estimates is a recipe for underperformance, and DORM is no exception.
Dorman Products has been on the receiving end of negative earnings estimate revisions as of late. For the current fiscal year, analysts have decreased estimates by 15.12% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $4.38/share, translating to negative growth of -7.98% relative to last year.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, DORM stock is in a sustained downtrend. Notice how shares have plunged below both the 50-day and 200-day moving averages signaled by the blue and red lines, respectively. The stock is making a series of lower lows, with no respite from the selling in sight. Also note how both moving averages have rolled over and are sloping down – another good sign for the bears.
Image Source: StockCharts
While not the most accurate indicator, DORM stock has also experienced what is known as a ‘death cross’, wherein the stock’s 50-day moving average crosses below its 200-day moving average. DORM would have to make a stern move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock. Shares have fallen nearly 20% in the past year alone and have failed to participate in this year’s rally.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to hit new highs anytime soon. The fact that DORM is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
DORM shares continue to experience substantial volatility and have widely underperformed this year. A recent uptick is providing bearish investors with an appealing entry point. Bulls should avoid this stock as there are plenty of better alternatives in the current market environment.