DXP (DXPE) Stock Trades Down, Here Is Why

What Happened?

Shares of industrial distributor DXP Enterprises (NASDAQ:DXPE) fell 3.5% in the morning session after the stock appeared to enter a period of profit-taking following a significant recent rally that pushed technical indicators into overbought territory. 

The pullback follows a strong run for the industrial distributor's shares, which had climbed about 30% over the past month and saw a sharp 7.7% jump just the day before., This rapid appreciation pushed the stock into what analysts call "overbought" territory. Technical indicators, such as the Relative Strength Index (RSI), suggested that the recent buying momentum might have been excessive, often signaling a potential near-term reversal or pullback as traders cash in on gains. 

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What Is The Market Telling Us

DXP’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 8 months ago when the stock gained 21.5% on the news that the company reported strong third-quarter earnings. DXP blew past analysts' sales, EPS, and EBITDA estimates as its acquisition-driven strategy continued to pay off. Notably, the company closed five acquisitions through the third quarter and already added two more for the next quarter. Zooming out, we think this was a good quarter with some key areas of upside.

DXP is up 12.9% since the beginning of the year, but at $95.25 per share, it is still trading 11% below its 52-week high of $107.03 from January 2025. Investors who bought $1,000 worth of DXP’s shares 5 years ago would now be looking at an investment worth $5,000.

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