XVARY Composite Score
31
/ 100
Weak
Combines growth, value, risk, and momentum factors into a single institutional-grade score.
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What it is
DLH sells federal health and security support services through 2,800 employees and government contracts.
How it gets paid
Last year Dlh made $344M in revenue. Technology-enabled business process outsourcing was the main engine at $120M, or 35% of sales.
Why it's growing
Revenue grew 324.5% last year. The $69M quarter mattered because it was 24% below last year.
What just happened
DLH posted $69M in revenue and -$0.09 EPS, then watched sales fall 24% vs. prior year.
At a Glance
C+ balance sheet — struggling to keep the lights on
40/100 earnings predictability — expect surprises
61.8x trailing p/e — you're paying up for this one
3.6% return on capital — nothing to write home about
$0.09 fy2025 eps est
XVARY composite: 31/100 — weak
What They Do
DLH sells federal health and security support services through 2,800 employees and government contracts.
DLH lives on prime contracts, or direct government awards, from four agencies: VA, HHS, DOD, and DHS. You are not selling a widget; you are selling compliance, staffing, and paperwork. Leaving is painful because 2,800 employees are already wired into that machine.
How They Make Money
$344M
annual revenue · their business grew +324.5% last year
Technology-enabled business process outsourcing
$120M
Program management solutions
$95M
Public health research
$85M
Analytics and systems engineering
$44M
The Products That Matter
Federal IT and admin support
Technology-Enabled BPO
$172M · about 50% of segment revenue
it is the largest line of business at roughly $172M, but it sits inside a company earning just an 18.8% gross margin overall. Scale helps. Margin does not.
largest segment
Agency execution and oversight
Program Management
$103M · about 30% of segment revenue
this $103M segment is big enough to matter, but it still depends on contracts being renewed and staffed efficiently. In a thin-margin model, execution errors show up fast.
30% of mix
Federal health research support
Public Health Research
$69M · about 20% of segment revenue
at roughly $69M, this is the smallest of the three segments shown here. It gives DLH exposure to public health budgets, but not enough diversification to offset a major contract miss elsewhere.
20% of mix
Key Numbers
$344M
annual revenue
That is the full-size business you are buying, not a tiny pilot project.
61.8x
trailing p/e
You are paying 61.8 years of current earnings for one year of profit.
9.9%
operating margin
For every $100 of sales, DLH keeps about $9.90 before interest and taxes.
$116M
long-term debt
That debt load is 57% of capital, so mistakes are expensive.
Financial Health
C+
Strength
- balance sheet grade C+ — weak — may struggle to fund operations
- risk rank 4 — safer than 20% of stocks
- price stability 25 / 100
- long-term debt $116M (57% of capital)
C+ — balance sheet grade and long-term debt are flagged. this stock carries more risk than average.
Total Return vs. Market
source: institutional data · return history unavailable
What Just Happened
missed estimates
DLH posted $69M in revenue and -$0.09 EPS, then watched sales fall 24% vs. prior year.
Revenue dropped from the prior year, and EPS moved from a $0.08 profit to a $0.09 loss. The quarter also came in with an 18.8% gross margin from the latest web data.
$69M
revenue
$0.09
eps
18.8%
gross margin
the number that mattered
The $69M quarter mattered because it was 24% below last year, which tells you the business is not printing easy growth.
source: company earnings report, 2026
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What Could Go Wrong
The #1 risk is federal contract concentration. DLH is a government contractor first, which means one lost re-compete or budget reset can hit the income statement faster than a normal commercial business.
Med
Federal contract concentration
The company depends on U.S. government work for virtually all of its revenue base. If even one major award is lost or delayed, a business this small feels it immediately.
The segment revenue shown here totals about $344M. A forced reset in that contract base would hit the whole story, not just one side business.
Med
Cash burn plus leverage
DLH burned $4.8M of free cash flow in Q1 and carries $116M of long-term debt. That is an uncomfortable pairing for an $87M equity value.
If negative free cash flow persists, the balance sheet gets tighter and management has fewer good options.
Med
Thin-margin service model
An 18.8% gross margin and -0.33% net margin leave almost nothing between stable operations and losses. This is what commoditized service work looks like.
A small drop in utilization, pricing, or contract timing can wipe out the already-thin earnings base behind the 61.8x trailing p/e.
Debt above market value, a $4.8M quarterly cash burn, and a low-margin contract base make this a prove-it story.
Source: institutional data · regulatory filings · risk analysis
Pay Attention To
Earnings
Next quarterly report
You need to see whether the $0.09 per-share loss starts narrowing. One more weak quarter makes the turnaround case harder to defend.
Metric
Free cash flow
The clearest fix is simple: stop burning cash. Another quarter near the recent $4.8M outflow would keep pressure on the balance sheet.
Contracts
Contract renewals and re-competes
This business runs on government awards. Any sign of a delayed renewal or lost bid matters more than polished corporate language on the call.
Margin trend
Whether thin margins get any thicker
Gross margin is 18.8% and net margin is negative. You do not need perfection here. You do need visible improvement.
Analyst Rankings
earnings predictability
40 / 100
A 40/100 score means reported results can move around more than you want. In human-speak, analysts do not see this as a steady earner.
risk rank
4
This system says it is safer than only about 20% of stocks. In human-speak, this sits on the risky end of the shelf.
Source: institutional data
Institutional Activity
institutional ownership data for DLHC is being compiled.
Source: institutional data
Price Targets
3-5 year target range
$6
Current price
Target midpoint · from current
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