What a fantastic six months it’s been for Douglas Dynamics. Shares of the company have skyrocketed 40.6%, hitting $47.01. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is it too late to buy PLOW? Find out in our full research report, it’s free.
Why Does Douglas Dynamics Spark Debate?
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Two Things to Like:
1. EPS Increasing Steadily
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Douglas Dynamics’s EPS grew at 9.9% compounded annual growth rate over the last five years, higher than its 5.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
2. Increasing Free Cash Flow Margin Juices Financials
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Douglas Dynamics’s margin expanded by 9.4 percentage points over the last five years. The company’s improvement shows it’s heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Douglas Dynamics’s free cash flow margin for the trailing 12 months was 9.3%.
One Reason to Be Careful:
Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Douglas Dynamics’s 5.7% annualized revenue growth over the last five years was tepid. This wasn’t a great result compared to the rest of the industrials sector, but there are still things to like about Douglas Dynamics.
Final Judgment
Douglas Dynamics has huge potential even though it has some open questions, and after the recent rally, the stock trades at 17.3× forward P/E (or $47.01 per share). Is now a good time to buy despite the apparent froth? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than Douglas Dynamics
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
