Ducommun Incorporated (DCO) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Ducommun Incorporated (DCO) Industrial Operations Profile

Ducommun Incorporated delivers engineering and manufacturing solutions for the aerospace and defense sectors, offering electronic and structural systems. With a history dating back to 1849, the company focuses on providing specialized components and assemblies, serving both commercial and military applications, and maintaining a beta of 1.00.

What Is the Investment Thesis for DCO?

Ducommun Incorporated presents a compelling investment case based on its established position in the aerospace and defense industries. The company's two-segment structure allows for diversified revenue streams, mitigating risk. Key value drivers include continued demand for aerospace components and systems, driven by both commercial and military sectors. While the company currently has a negative profit margin of -4.1%, strategic initiatives aimed at improving operational efficiency and cost management could lead to enhanced profitability. The company's beta of 1.00 suggests market correlation. Investors should monitor gross margin, currently at 26.9%, as an indicator of pricing power and cost control effectiveness.

Based on FMP financials and quantitative analysis

DCO Key Highlights

• Market capitalization of $2.54B, reflecting investor confidence in the company's market position.
• Gross margin of 26.9%, indicating the profitability of Ducommun's products and services before operating expenses.
• Employs 2,180 individuals, showcasing the scale of its operations and manufacturing capabilities.
• Beta of 1.00, suggesting the stock's volatility is in line with the overall market.
• Operates through two segments, Electronic Systems and Structural Systems, providing diversified revenue streams.

Who Are DCO's Competitors?

DCO is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are DCO's Key Strengths?

• Established presence in the aerospace and defense industries.
• Diversified product and service offerings.
• Strong engineering and manufacturing capabilities.
• Long-standing customer relationships.

What Are DCO's Weaknesses?

• Negative profit margin.
• Dependence on the aerospace and defense industries.
• Exposure to cyclical industry trends.
• Potential for cost overruns on complex projects.

What Could Drive DCO Stock Higher?

• Increased demand for air travel driving commercial aerospace growth.
• Rising geopolitical tensions leading to increased defense spending.
• Potential new contracts with space program agencies.
• Strategic initiatives to improve operational efficiency and reduce costs.

What Are the Key Risks for DCO?

• Negative return on equity (-4.9%) — the business is not currently generating profit on shareholder capital.
• Economic downturns affecting the aerospace and defense industries.
• Increased competition from other manufacturers.
• Technological obsolescence.
• Geopolitical instability impacting defense spending.

What Are the Growth Opportunities for DCO?

• Expansion in the Commercial Aerospace Sector: The increasing demand for air travel and the subsequent need for new aircraft and maintenance services present a significant growth opportunity for Ducommun. By leveraging its expertise in structural and electronic systems, Ducommun can secure contracts with aircraft manufacturers and airlines, driving revenue growth. The commercial aerospace market is projected to grow, offering a substantial addressable market for Ducommun.
• Increased Government Defense Spending: Rising geopolitical tensions and increased defense budgets in various countries create opportunities for Ducommun to expand its presence in the defense sector. The company's expertise in manufacturing components for military aircraft and defense systems positions it well to capitalize on this trend. Securing contracts with defense agencies and prime contractors can lead to significant revenue growth.
• Penetration of the Space Program Market: With renewed interest in space exploration and the growth of the commercial space industry, Ducommun can leverage its engineering and manufacturing capabilities to provide components and systems for spacecraft and related infrastructure. This market offers high growth potential as space programs expand and new technologies are developed. The space program market represents a long-term growth opportunity for Ducommun.
• Diversification into Medical and Industrial Markets: While aerospace and defense are core markets, Ducommun can diversify its revenue streams by expanding into the medical and industrial sectors. Leveraging its expertise in manufacturing high-precision components and systems, Ducommun can target opportunities in medical devices, industrial equipment, and other related fields. Diversification can reduce reliance on the aerospace and defense industries and provide more stable revenue streams.
• Strategic Acquisitions and Partnerships: Ducommun can pursue strategic acquisitions and partnerships to expand its capabilities, market reach, and customer base. Acquiring companies with complementary technologies or market access can accelerate growth and enhance Ducommun's competitive position. Forming partnerships with other industry players can also provide access to new markets and technologies.

What Opportunities Does DCO Have?

• Expansion in the commercial aerospace sector.
• Increased government defense spending.
• Penetration of the space program market.
• Diversification into medical and industrial markets.

What Threats Does DCO Face?

• Economic downturns affecting the aerospace and defense industries.
• Increased competition from other manufacturers.
• Technological obsolescence.
• Geopolitical instability.

What Are DCO's Competitive Advantages?

• Specialized Engineering Expertise: Ducommun possesses specialized engineering expertise in designing and manufacturing complex electronic and structural systems for aerospace and defense applications.
• Long-Standing Customer Relationships: The company has established long-standing relationships with key customers in the aerospace and defense industries, providing a stable revenue base.
• High Barriers to Entry: The aerospace and defense industries have high barriers to entry due to stringent regulatory requirements, long development cycles, and the need for specialized expertise.
• Reputation for Quality and Reliability: Ducommun has a reputation for providing high-quality and reliable products and services, which is critical in the aerospace and defense industries.

What Does DCO Do?

Founded in 1849 and headquartered in Santa Ana, California, Ducommun Incorporated has evolved from its origins into a key provider of engineering and manufacturing solutions. The company operates through two primary segments: Electronic Systems and Structural Systems. The Electronic Systems segment focuses on cable assemblies, interconnect systems, printed circuit board assemblies, and higher-level electronic, electromechanical, and mechanical components. This segment also offers engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components, structural assembly products, and metal and composite bonded structures. Ducommun serves a diverse range of markets, including commercial aircraft, military fixed-wing and rotary-wing aircraft, space programs, and industrial and medical sectors. With 2,180 employees, Ducommun continues to adapt to the evolving needs of its core industries.

What Products and Services Does DCO Offer?

• Designs and manufactures electronic systems for aerospace and defense applications.
• Produces structural components for aircraft, including winglets and fuselage panels.
• Provides cable assemblies and interconnect systems.
• Offers printed circuit board assemblies.
• Supplies illuminated pushbutton switches and panels for aviation.
• Delivers microwave and millimeter switches and filters for radio frequency systems.
• Provides engineering expertise for aerospace system design and testing.

How Does DCO Make Money?

• Generates revenue through the sale of electronic systems and structural components.
• Secures contracts with aerospace and defense companies for manufacturing and engineering services.
• Provides aftermarket support and maintenance services for its products.
• Focuses on long-term relationships with key customers in the aerospace and defense industries.

What Industry Does DCO Operate In?

Ducommun Incorporated operates within the aerospace and defense industry, a sector characterized by high barriers to entry, stringent regulatory requirements, and long-term contracts. The industry is influenced by factors such as government defense spending, commercial aircraft production rates, and technological advancements. Ducommun's position as a provider of both electronic and structural systems allows it to capitalize on various segments within this market. The competitive landscape includes larger aerospace and defense contractors as well as specialized component manufacturers. The company's ability to secure and maintain long-term contracts is crucial for sustained growth.

Who Are DCO's Key Customers?

• Commercial aircraft manufacturers.
• Military aircraft manufacturers.
• Defense contractors.
• Space program agencies and companies.
• Industrial and medical equipment manufacturers.

Ducommun Incorporated (DCO) Valuation Context

Valued at $2.54B, DCO is classified as a mid-cap stock. Relative to its peer group, DCO's quantitative score of 37/100 is below the peer average of 61/100.

ROE -5%Key Financial Metrics

Return on equity for Ducommun Incorporated stands at -4.9%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -2.8%, showing how much profit it generates from its asset base. Its free cash flow yield is -1.3%, a gauge of the cash the business throws off relative to its market value. A current ratio of 3.67 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is -1.2%, the inverse of the P/E and a quick read on earnings relative to price.

F-Score 4/9Financial Health

Ducommun Incorporated's Piotroski F-Score is 4/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 4.52 places it in the safe zone, indicating low near-term bankruptcy risk.

FY2026 estForward Outlook

Wall Street analysts project Ducommun Incorporated revenue of about $884.9M for fiscal 2026, with EPS near $4.16. The estimate reflects 3 contributing analysts.

DCO Financials

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DCO Analyst Consensus

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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