BOOM · DMC Global
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $9.51
Note written ·
Price against the kill line
17.7% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $9.51, on record since 11 November 2026. The shares are up 7.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $9.51, near the 52-week intraday high of $9.79 set on 2 November 2026, which would show the shares leading the S&P 500 and prove this call wrong; so would fourth-quarter adjusted EBITDA attributable to DMC above the $13 million top of the guide.
Research onlyNot in the portfolio.
Key figures from the filings · Materials
Quarter to 30 September 2026, filed 27 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 173
- Revenue, change on a year (%)
- +14.1
- Gross margin (%)
- 26.9
- Operating margin (%)
- 8.4
- Free cash flow, four quarters ($M)
- 12.4
- Net cash, cash less debt ($M)
- −13.7
- Enterprise value to sales (×)
- 0.3
- Enterprise value to operating income (×)
- 38.7
All filed numbers
What DMC Global reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 173 | +14.1 | 26.9 | 8.4 |
| first filed | 157 | +0.9 | 21.9 | 3.3 |
| first filed | 136 | −14.9 | 18.8 | −3.0 |
| first filed | 144 | −5.8 | 17.1 | −7.8 |
| first filed | 152 | −0.6 | 21.7 | 0.4 |
| first filed | 156 | −9.2 | 23.6 | 2.5 |
| Pre-tax income ($M) | 13.3 |
| Net income ($M) four quarters: −7.0 | 9.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +1.9 |
| Operating cash flow ($M) | 22.4 |
| Capital spending ($M) | 9.9 |
| Free cash flow ($M) | 12.4 |
| Cash and short-term investments ($M) | 38.0 |
| Debt ($M) long-term debt | 51.7 |
| Net cash, cash less debt ($M) | −13.7 |
| Deferred revenue ($M) +75.6% on a year | 24.8 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 109 |
| Inventory ($M) | 172 |
| Shareholders' equity ($M) | 250 |
| Market value ($M) | 161 |
| Enterprise value, market value plus net debt ($M) | 175 |
| Enterprise value to sales (×) | 0.3 |
| Enterprise value to operating income (×) | 38.7 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.6 |
| Free-cash-flow yield (%) | 7.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 0.7% of shares outstanding sold short, 1.4 days of average trading to cover, −16.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $111K |
The thesis
DMC Global shares look more likely to lag the S&P 500 than lead it. The fourth-quarter guide is lower than the third quarter, and the 40% minority holder of Arcadia (the building-products unit) still holds a put worth at least $187.08 million. The fourth-quarter report, expected around 25 February 2027, settles whether margins hold once tariff refunds fade.
The rating is Low because the recovery is already visible in the price. The shares closed at $7.99 on 11 November 2026, 7.0% above the $7.47 close of 13 August 2026 and above both the 50-day average of $6.40 and the 200-day average of $6.54 (adjusted daily closes). The 52-week intraday high of $9.79 was set on 2 November 2026, and the last close is 18.4% below it.
The business improvement is measured. Third-quarter 2026 sales were $172.8 million, up 14% year over year, and gross margin was 26.9% against 21.7%, per the company's 27 October 2026 release. A search through 12 November 2026 found no put exercise notice, share offering or guidance change since that release.
Bullish and bearish views on DMC Global Inc.
The bull case on DMC Global Inc. (BOOM), in brief: margins expanded in every segment. The bear case: the fourth-quarter guide steps down.
Bull case
- Margins expanded in every segment. Third-quarter 2026 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) attributable to DMC rose in all three segments, per the 27 October 2026 release. Arcadia rose to $6.8 million from $5.1 million, DynaEnergetics to $6.5 million from $4.9 million excluding refunds, and NobelClad to $4.6 million from $2.1 million.
- Arcadia volumes are recovering. Arcadia building-products sales rose 25% year over year to $76.9 million in the third quarter of 2026. The Form 10-Q credits higher volumes across all product lines.
- NobelClad orders keep coming. NobelClad sales rose 38% to $28.8 million in the third quarter. Backlog was $72.4 million at 30 September 2026, with a rolling 12-month book-to-bill ratio of 1.19, per the release.
- Debt is the lowest in years. Net debt was $13.7 million at 30 September 2026, the lowest since the December 2021 Arcadia acquisition. Credit-facility leverage was 1.41x against a 3.0x maximum, per the company.
- Cash generation was strong. Operating cash flow was $17.5 million in the third quarter of 2026. Cash rose to $38.0 million at 30 September 2026 from $31.9 million at 2025 year-end.
- Quantitative ratings turned positive. MarketBeat reported on 30 October 2026 that Zacks Research moved the shares to strong buy, and on 31 October 2026 that Wall Street Zen did the same.
Bear case
- The fourth-quarter guide steps down. Guidance from 27 October 2026 is $154 million to $164 million in sales and $10 million to $13 million in adjusted EBITDA attributable to DMC, both below the third quarter. The company cites a planned shutdown of Arcadia's California finishing plant, softer large construction projects and rising input costs.
- Tariff refunds flatter the headline. Refunds added $5.4 million to third-quarter adjusted EBITDA, taking it to $19.0 million from $13.6 million excluding them, per the 27 October 2026 release. They totalled $6.9 million over the first nine months of 2026.
- The Arcadia put remains open. The put has been exercisable since 6 September 2026 at a floor value of $187.08 million, per the third-quarter Form 10-Q. Up to 80% can be paid in convertible preferred stock, against net debt of $13.7 million at 30 September 2026.
- Upgrades did not hold the price. The shares traded as high as $9.79 on 2 November 2026, then closed at $7.05 on 5 November 2026 and $7.01 on 6 November 2026. A part of that drop has since been recovered, to $7.99 on 11 November 2026.
- Insider filings show withholding only. The latest Form 4, filed 3 November 2026, records 21,606 shares withheld for tax by CEO James O'Leary at $9.35 on 1 November 2026. It is a tax withholding on vested stock, not an open-market purchase.
Price setup
The shares have moved in a wide range since the third-quarter report. Closes were $7.90 on 4 November 2026, $7.05 on 5 November 2026, $7.01 on 6 November 2026, $8.12 on 9 November 2026, $7.77 on 10 November 2026 and $7.99 on 11 November 2026.
The 52-week closing low is $4.73, set on 13 March 2026. The last close sits above the 50-day and 200-day averages, so the shares have recovered the earnings reaction in trend terms. The 52-week intraday high of $9.79 on 2 November 2026 is the upper edge of that range.
The price already reflects the third-quarter beat and the cost-cut recovery. The remaining discount to the 2 November 2026 high is consistent with the market also weighing the guide-down and the put, which is a view, not a measured fact.
Analyst targets dated before the 27 October 2026 report are not cited here. Searches found no target change after that report.
Catalysts ahead
- ~25 February 2027 (est.): Q4 and full-year 2026 report. Shows whether adjusted EBITDA lands within the $10 million to $13 million guide once the California plant shutdown is included, and whether margins hold without tariff refunds.
What would change the view
A daily close above $9.51, near the 52-week intraday high of $9.79 set on 2 November 2026, which would show the shares leading the S&P 500 and prove this call wrong; so would fourth-quarter adjusted EBITDA attributable to DMC above the $13 million top of the guide.
What it trades with
The shares follow three separate end markets. Arcadia depends on construction, DynaEnergetics on North American well-completion activity, and NobelClad on its order backlog of $72.4 million at 30 September 2026. Tariff policy also matters, since refunds totalled $6.9 million in the first nine months of 2026. The Arcadia put is a company-specific variable that no sector move would explain.
The evidence, claim by claim (7)
- Q3 2026 net sales were $172.8 million, up 14% year over year; gross margin was 26.9% versus 21.7% a year earlier. DMC Global Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Q3 2026 adjusted EBITDA attributable to DMC was $13.6 million excluding $5.4 million of tariff refunds ($19.0 million including them), versus $8.6 million in Q3 2025. DMC Global Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Q4 2026 guidance: sales of $154 million to $164 million and adjusted EBITDA attributable to DMC of $10 million to $13 million. DMC Global Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Q3 2026 adjusted EPS was $0.48 against a $0.10 consensus estimate; Q4 sales guidance midpoint compared with a $158.25 million estimate. Benzinga, 27 October 2026 · as of
- Arcadia's 40% put option became exercisable on 6 September 2026 at a floor value of $187.08 million and was unexercised through the 10-Q report date. DMC Global Q3 2026 Form 10-Q · as of
- Net debt was $13.7 million, the lowest since the December 2021 Arcadia acquisition; credit-facility leverage was 1.41x against a 3.0x maximum. DMC Global Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- CEO James O'Leary had 21,606 shares withheld for tax at $9.35 on 1 November 2026. SEC Form 4 filed 3 November 2026 · as of
Sources
- DMC Global Inc. - Form 8-K - FY2026 · sec.gov ·
- DMC Global (NASDAQ:BOOM) Stock Moved Up to Strong-Buy by Zacks Research · marketbeat.com ·
- DMC Global (NASDAQ:BOOM) Stock Moved Up to Strong-Buy by Wall Street Zen · marketbeat.com ·
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