DXP Enterprises' first quarter results for 2026 were met with a significant negative market reaction, reflecting investor concerns about both sales growth and profitability relative to Wall Street expectations. Management attributed the uneven performance to an unexpected weakness in January sales, which gradually improved through March. CEO David Little described January as “surprisingly slow” across all key segments, without a clear explanation, but emphasized that February and March saw a rebound, aided by strengths in the Innovative Pumping Solutions business and improved gross margins. The quarter’s increased expenses were linked to one-off items, including healthcare claims and acquisition-related costs, which management expects to normalize.

Is now the time to buy DXPE? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From DXP’s Q1 Earnings Call

• Zachary Ryan Marriott (Stephens): Asked for February daily sales numbers and if Q2 margins could differ meaningfully from Q1. CFO Kent Yee provided February daily sales figures and noted potential for higher margins in Q2, citing sales momentum and SG&A leverage.
• Marriott (Stephens): Inquired about fluctuating corporate expenses and whether the $28 million in Q1 was a new baseline. Yee responded that some Q1 expenses were one-time items, with future costs likely to fall between recent highs and lows.
• Diletta Sayobayeva: Asked about pricing dynamics in energy markets and any impact on margins and demand. CEO David Little explained that while energy demand is up, aggressive pricing is tempered by customer caution, and margin opportunities arise from faster delivery and remanufacturing.
• Sayobayeva: Requested insights from the DICE conference on new commercial or acquisition opportunities. Yee emphasized a strong focus on water/wastewater acquisitions and noted several deals in the pipeline under letter of intent.
• No additional analyst questions: The call concluded after these exchanges, with management reiterating confidence in the year ahead.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be watching (1) the pace and successful integration of newly acquired businesses, especially in water and wastewater, (2) sustained improvement in gross margin and SG&A normalization as cost pressures abate, and (3) backlog conversion and sales acceleration in core segments such as Innovative Pumping Solutions. Execution on these fronts will be critical for validating management’s growth strategy and addressing recent volatility in operating performance.

DXP currently trades at $146.37, down from $181.51 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

The Best Stocks for High-Quality Investors

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 meeting 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.