Jim Cramer Signals Caution on Dorman Products, Warns Investors to Stay Away

Renowned investor Jim Cramer has issued a stark warning against Dorman Products (DORM), stating he will no longer be investing in the auto parts company. The comment, made during a recent market commentary, reflects growing concern over the stock’s valuation and underlying business trends.

Jim Cramer, host of CNBC’s 'Mad Money,' has publicly declared he will avoid Dorman Products (DORM) moving forward, citing elevated risk and uncertain growth prospects. The statement, delivered during a live segment, marks a notable shift in sentiment for a stock that has seen volatility over the past 18 months. Cramer emphasized that despite DORM’s strong position in the aftermarket auto parts sector, current fundamentals do not justify its premium valuation. DORM’s share price has risen nearly 45% year-to-date, outpacing the broader consumer discretionary sector, which gained 22%. However, the company’s trailing twelve-month price-to-earnings ratio now stands at 38.6, significantly above the sector average of 21.2. Additionally, DORM’s revenue growth has decelerated, with Q3 2025 sales increasing just 5.1% year-over-year—down from 12.3% in the same quarter last year. The warning comes amid broader market skepticism toward high-multiple growth stocks, particularly in cyclical sectors like automotive. Analysts note that DORM’s reliance on North American replacement parts demand, which is sensitive to vehicle age and economic conditions, adds to the uncertainty. Institutional ownership has also declined, with insiders selling 2.1% of shares in the last quarter. Investors and traders are now reassessing their exposure to DORM, with options volume spiking 230% over the last 48 hours. The stock has reacted with a 3.8% drop since the commentary, signaling short-term market sensitivity to Cramer’s influence.