DLH Holdings Corp. (NASDAQ: DLHC)

Sector: Industrials Industry: Specialty Business Services CIK: 0000785557
Market Cap 73.98 Mn
P/B 0.66
P/E -68.75
P/S 0.23
ROIC (Qtr) 3.27
Div Yield % 0.00
Rev 1y % (Qtr) -24.11
Total Debt (Qtr) 149.80 Mn
Debt/Equity (Qtr) 1.34
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About

DLH Holdings Corp., commonly known as DLH, operates in the federal government services industry, providing solutions centered on digital transformation, science research and development, and systems engineering and integration. The company is listed on the stock exchange under the ticker symbol DLHC. DLH's primary business activities encompass delivering improved health and cyber readiness solutions for federal government customers. The company operates in several countries, with its services primarily delivered across the United States. DLH's...

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Investment thesis

Bull case

  • Operating cash flow of 29.98M provides strong 15.63x coverage of stock compensation 1.92M, indicating sustainable incentive practices.
  • Operating cash flow of 29.98M fully covers other non-current liabilities 1.04M by 28.69x, showing strong long-term stability.
  • Operating cash flow of 29.98M provides solid 0.73x coverage of current liabilities 41.03M, showing strong operational health.
  • Tangible assets of 57.59M provide robust 9.26x coverage of other current liabilities 6.22M, indicating strong asset backing.
  • Free cash flow of 30.26M provides healthy 0.74x coverage of current liabilities 41.03M, showing strong operational health.

Bear case

  • Free cash flow of 30.26M provides weak coverage of capital expenditures of (272000), with a -111.24 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 29.98M provides minimal -47.37x coverage of tax expenses of (633000), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 12.59M show weak coverage of depreciation charges of 17.17M, with a 0.73 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 17.17M relative to operating cash flow of 29.98M, which is 0.57x suggests significant maintenance capital requirements affecting free cash flow.
  • Debt issuance of (30.36M) significantly exceeds working capital of (1.38M), which is 21.93x, indicating potentially unsustainable leverage for operational funding.

Concentration Risk Benchmark Breakdown of Revenue (2025)

Contract with Customer, Basis of Pricing Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Business Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTAS Cintas Corp 120.08 Bn 556.91 33.85 3.24 Bn
2 RELX Relx Plc 56.19 Bn 20.01 4.34 9.82 Bn
3 TRI Thomson Reuters Corp /Can/ 37.42 Bn 24.91 5.00 2.44 Bn
4 CPRT Copart Inc 36.25 Bn 22.74 7.79 0.10 Bn
5 RBA Rb Global Inc. 19.20 Bn 49.09 4.24 4.21 Bn
6 ULS UL Solutions Inc. 14.12 Bn 43.32 4.92 0.74 Bn
7 GPN Global Payments Inc 11.52 Bn 284.78 8.66 16.20 Bn
8 ARMK Aramark 10.37 Bn 32.72 0.55 6.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.77 2.48
EV to Cash from Ops. EV/CFO 7.30 30.22
EV to Debt EV to Debt 1.46 31.08
EV to EBIT EV/EBIT 17.39 94.66
EV to EBITDA EV/EBITDA 7.35 18.37
EV to Free Cash Flow [EV/FCF] EV/FCF 7.23 -20.73
EV to Market Cap EV to Market Cap 2.96 178.66
EV to Revenue EV/Rev 0.68 8.12
Price to Book Value [P/B] P/B 0.66 5.37
Price to Earnings [P/E] P/E -68.75 65.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -15,800.59
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 10.14
Dividend per Basic Share Div per Share (Qtr) 0.00 0.35
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.65
Interest Coverage Int. cover (Qtr) 0.88 30.46
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 122.41 -178.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -43.02 155.14
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -62.76 -34.92
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -27.11 -86.28
EBIT Growth (1y) % EBIT 1y % (Qtr) -46.94 -22.62
EBT Growth (1y) % EBT 1y % (Qtr) -124.10 -287.35
EPS Growth (1y) % EPS 1y % (Qtr) -117.78 -118.47
FCF Growth (1y) % FCF 1y % (Qtr) 217.05 -146.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -21.46 2.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.14 0.84
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.03
Cash Ratio Cash Ratio (Qtr) 0.01 1.15
Current Ratio Curr Ratio (Qtr) 0.97 4.12
Debt to Equity Ratio Debt/Equity (Qtr) 1.34 0.92
Interest Cover Ratio Int Coverage (Qtr) 0.88 30.46
Times Interest Earned Times Interest Earned (Qtr) 0.88 30.46
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.20 -33.89
EBIT Margin % EBIT Margin % (Qtr) 3.90 -43.32
EBT Margin % EBT Margin % (Qtr) -0.53 -44.88
Gross Margin % Gross Margin % (Qtr) 18.70 39.81
Net Profit Margin % Net Margin % (Qtr) -0.30 -41.60