What Happened?
Shares of industrial distributor DXP Enterprises (NASDAQ: DXPE) fell 17.8% in the morning session after the company reported third-quarter results that showed a significant miss on profit expectations. While the industrial distributor's sales grew 8.6% year-over-year to $513.7 million, beating analyst estimates, its adjusted earnings did not meet forecasts. The company posted an adjusted profit of $1.34 per share, which was 14.4% below the consensus estimate of $1.57 per share. The market reacted negatively to the earnings shortfall, overlooking the better-than-expected revenue. This suggested that investors were more focused on profitability, and the failure to meet profit expectations led to a sharp sell-off in the shares.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DXP? Access our full analysis report here.
What Is The Market Telling Us
DXP’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for DXP and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 30 days ago when the stock dropped 5.8% on the news that the stock moved amid a broader market downturn as negative economic news and signs of investor fatigue halted a recent rally. A report from the New York Fed showed that consumer inflation expectations had risen, adding to economic headwinds. At the same time, the market's recent ebullience, driven by optimism over artificial intelligence, gave way to concerns that the rally was excessive, leading to a pullback. This sentiment was amplified by worries that if the AI bubble were to burst, it could negatively impact sectors beyond technology, including industrials. The market appeared to be walking a tightrope, with positive factors like anticipated monetary easing being offset by negative pressures such as slowing consumption and rising inflation concerns.
DXP is up 21.4% since the beginning of the year, but at $102.41 per share, it is still trading 19.8% below its 52-week high of $127.63 from October 2025. Investors who bought $1,000 worth of DXP’s shares 5 years ago would now be looking at an investment worth $5,968.
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