Assessing Dorman Products (DORM) Valuation After Jim Cramer’s Warning and Reaffirmed 2025 Growth Guidance
Jim Cramer’s recent “stay away” remarks about Dorman Products (DORM), coming right after the company reaffirmed its 2025 growth guidance, have put the stock under a spotlight for all the wrong reasons.
See our latest analysis for Dorman Products.
Those comments have landed at a tricky moment for Dorman, with the share price now around $128.01 and a 90 day share price return of roughly negative 21 percent contrasting with a still solid three year total shareholder return near 59 percent. This suggests long term holders remain ahead even as near term momentum has clearly cooled.
If this tug of war in auto parts has you reassessing where growth and conviction really lie, it could be worth scanning auto manufacturers for other ideas in the space.
With shares trading at a sizeable discount to analyst targets despite reaffirmed double digit earnings growth for 2025, the key question now is whether Dorman is quietly undervalued or if the market already sees growth topping out.
Most Popular Narrative Narrative: 26.2% Undervalued
With the most widely followed narrative placing fair value well above the recent 128.01 close, the debate shifts from momentum to whether expectations are too ambitious.
Dorman's continuous launch of new, high margin, proprietary products especially those "new to the aftermarket" or addressing OE part flaws further expands gross and operating margins, with recent quarters evidencing margin expansion primarily attributed to strong adoption of these innovations.
Want to see what powers that upside call? This narrative quietly leans on steady top line expansion, resilient margins and a richer future earnings multiple. Curious which assumptions do the heavy lifting behind that fair value label?
Result: Fair Value of $173.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent tariff uncertainty and faster than expected EV adoption could compress margins and dent long term demand, which would challenge the current undervaluation case.
Find out about the key risks to this Dorman Products narrative.
Build Your Own Dorman Products Narrative
If you are unconvinced by this view, or simply want to dig into the numbers yourself, you can build a custom thesis in minutes: Do it your way.
A great starting point for your Dorman Products research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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