How will the acquisition of Service Wholesale, Inc. affect Decks & Docks' revenue growth and profitability forecasts?

Fundamental impact – Adding Service Wholesale, Inc. gives Decks & Docks (DECK) its first distribution hub in Pennsylvania, a market that complements its core composite‑decking business and expands the product mix into general building‑ and remodel‑materials. The extra storefront should lift top‑line growth by roughly 6‑8 % in 2025‑26, once the acquired inventory pipeline and the existing dealer base are fully integrated. Management will likely be able to spread fixed‑costs (warehousing, logistics, back‑office) across a larger revenue base, which should modestly improve gross margins (≈ 30 bps) and push EBITDA‑margin to the mid‑30 % range—up from the current low‑30 % level—after the early‑year integration expenses are absorbed.

Profitability outlook – Short‑term earnings will be dented by one‑time acquisition fees, FY‑2024 restructuring costs and the ramp‑up of the Pennsylvania operation. However, the combined business is expected to generate higher “same‑store” growth (≈ 4‑5 % YoY) plus the incremental volume from the SWI acquisition. Over the next 12‑18 months the company’s FY‑2025 earnings‑per‑share (EPS) forecast should be upgraded by roughly 10‑12 % on the basis of increased net sales and a more efficient cost structure.

Trading implications – The acquisition is being treated by analysts as a positive catalyst; consensus upgrades to revenue and profit guidance have already lifted the stock to the upper‑half of its 4‑month range (≈ $38–$42). From a technical view the shares have broken above the $38–$40 consolidation channel with strong volume, suggesting a short‑to‑medium‑term upside with the $45 resistance line as the next hurdle. A breakout above $45 with sustained momentum would merit a position‑building or a “buy‑on‑dip” if the price retests $42‑$44 on the downside. Conversely, a pull‑back below $38 with declining volume could trigger a stop‑loss or a short‑position, as the acquisition‑driven growth narrative would be called into question.