Element Solutions (ESI) AI Stock Analysis

• Market Cap: $6.47B
• Dividend Yield: 1.2%
• Average Volume (3M): 2.13M
• Price to Earnings (P/E): 27.1
• Beta (1Y): 1.31
• Revenue Growth: 3.87%
• EPS Growth: -10.30%
• Country: US
• Employees: 5,300
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.41
• Shares Outstanding: 241,999,910
• 10 Day Avg. Volume: 2,466,826
• 30 Day Avg. Volume: 2,126,286
• PEG Ratio: 0.24
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 2.51
• P/FCF Ratio: 20.97
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 2.86
• Enterprise Value/Gross Profit: 6.80
• Enterprise Value/Ebitda: 14.06
• 1Y Price Target: $31.33
• Price Target Upside: 17.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 74 Outperform
• Price Target: $30.00 ▲(12.28% Upside)

Element Solutions' strong financial performance and positive earnings call sentiment are key strengths, driving a favorable outlook. The technical indicators support a positive trend, though valuation remains a concern with a high P/E ratio. The significant decline in free cash flow growth is a risk that needs addressing to maintain long-term growth.

Positive Factors

Electronics Segment Growth

Consistent growth in the electronics segment indicates strong demand and market expansion, reinforcing Element Solutions' position in a key revenue-generating area.

Micromax Acquisition

The acquisition of Micromax is expected to enhance earnings and expand market capabilities, supporting long-term strategic growth and competitive positioning.

Industrial Segment Margin Improvement

Margin improvements in the industrial segment demonstrate operational efficiency and potential for sustained profitability, enhancing overall financial health.

Negative Factors

Decline in Power Electronics Sales

The decline in power electronics sales due to a weaker EV market poses a challenge, potentially affecting revenue from a growing industry segment.

Soft Macroeconomic Backdrop

A soft macroeconomic environment can hinder growth prospects and demand in key markets, impacting Element Solutions' revenue and profitability.

Decline in Free Cash Flow Growth

The significant decline in free cash flow growth raises concerns about cash generation and financial flexibility, crucial for sustaining long-term operations and investments.

Element Solutions Business Overview & Revenue Model

Company Description

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies solder technologies, fluxes, cleaners, and other attachment materials for the electronics assembly industry; proprietary liquid chemical processes to manufacture printed circuit boards; and advanced copper interconnects, die attachment, wafer bump processes, and photomask technologies for integrated circuit fabrication and semiconductor packaging. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

How the Company Makes Money

Element Solutions generates revenue primarily through the sale of specialty chemicals and advanced materials to various industries. Key revenue streams include the electronics segment, which contributes significantly through the provision of chemicals used in semiconductor manufacturing and circuit board production. The industrial segment also provides a steady income through surface treatment solutions and coatings for automotive and other industrial applications. Additionally, ESI benefits from strategic partnerships with leading manufacturers and technology firms, which enhance its product offerings and market reach. The company’s focus on innovation and R&D further drives revenue growth by enabling the development of new products that meet evolving industry needs.

Element Solutions Financial Statement Overview

Summary

Element Solutions demonstrates strong profitability with a gross profit margin of 41.8% and a net profit margin of 9.7%. The company also shows robust cash flow generation with a positive free cash flow growth rate of 9.54%. However, moderate revenue growth and significant debt levels slightly temper the overall financial performance.

Income Statement

Element Solutions shows a strong gross profit margin of 41.8% in the TTM period, reflecting efficient production costs. The net profit margin of 9.7% and a stable EBIT margin of 13.7% indicate robust operating performance. However, the revenue growth rate is moderate at 1.27% from the previous year, suggesting steady but unspectacular growth. EBITDA margin remains healthy at 14.9%, pointing to good cash generation from operations.

Balance Sheet

The company maintains a solid debt-to-equity ratio of 0.62, indicating a balanced leverage position. Return on equity is commendable at 9.2%, reflecting effective use of shareholder funds. The equity ratio is stable at 52.5%, suggesting a strong asset base. However, the total debt remains significant, which could pose a risk if earnings decline.

Cash Flow

Element Solutions achieves a positive free cash flow growth rate of 9.54% over the previous year, demonstrating improved cash generation capability. The operating cash flow to net income ratio of 1.39 indicates strong cash conversion. The free cash flow to net income ratio of 1.13 further underscores efficient management of cash flows. These metrics suggest a healthy cash position, aiding in financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.50B	2.46B	2.33B	2.55B	2.40B	1.85B
Gross Profit	1.05B	1.04B	918.50M	952.70M	960.80M	786.00M
EBITDA	507.60M	501.60M	345.10M	496.10M	475.50M	305.90M
Net Income	239.40M	244.20M	118.10M	187.20M	203.30M	75.70M
Balance Sheet
Total Assets	5.05B	4.87B	4.97B	4.90B	5.14B	4.48B
Cash, Cash Equivalents and Short-Term Investments	594.30M	359.40M	289.30M	265.60M	330.10M	291.90M
Total Debt	1.63B	1.91B	2.03B	1.98B	1.97B	1.57B
Total Liabilities	2.38B	2.48B	2.63B	2.55B	2.64B	2.17B
Stockholders Equity	2.65B	2.38B	2.33B	2.33B	2.48B	2.32B
Cash Flow
Free Cash Flow	269.90M	293.60M	283.10M	249.90M	276.20M	232.50M
Operating Cash Flow	337.40M	362.00M	335.80M	297.70M	322.50M	261.30M
Investing Cash Flow	287.50M	-73.80M	-250.20M	-75.20M	-568.90M	-39.90M
Financing Cash Flow	-405.40M	-206.60M	-58.70M	-275.60M	290.00M	-123.60M

Element Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESI, the sentiment is Positive. The current price of 26.72 is above the 20-day moving average (MA) of 25.91, above the 50-day MA of 25.90, and above the 200-day MA of 23.88, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 57.14 is Neutral, neither overbought nor oversold. The STOCH value of 73.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESI.

Element Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BCPC	―	$4.97B	33.58	12.06%	0.57%	7.55%	22.43%
AXTA	―	$6.07B	13.66	21.75%	―	-1.83%	40.64%
ESI	―	$6.47B	27.08	9.40%	1.20%	3.87%	-10.30%
NEU	―	$7.22B	16.22	29.26%	1.45%	-1.11%	5.15%
EMN	―	$6.83B	8.36	14.52%	5.58%	1.60%	-3.97%
SXT	―	$4.00B	28.80	12.31%	1.82%	4.25%	56.51%
Sector *	―	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Element Solutions Corporate Events

Element Solutions Reports Record Q3 2025 Results

Element Solutions Inc is a global specialty chemicals technology company that provides innovative solutions to enhance the performance of products across various industries, including electronics, automotive systems, and offshore energy. In its third quarter of 2025, Element Solutions reported record results with net sales of $656 million, marking a 2% increase from the previous year. The company achieved an adjusted EBITDA of $147 million, the highest since its founding, despite a slight decrease in net income to $39 million. The electronics segment led the growth with an 11% increase in net sales, while the Industrial & Specialty segment faced a decline due to divestitures. The company also reported strong cash flows from operating activities amounting to $100 million. Looking ahead, Element Solutions is optimistic about its future growth, narrowing its full-year adjusted EBITDA guidance to the higher end of its previous range. The recent acquisition of Micromax is expected to contribute significantly to earnings in 2026, and the company continues to explore opportunities for further growth through new product introductions and potential acquisitions.

Element Solutions Reports Record Earnings and Strategic Growth

Element Solutions recently held its earnings call, showcasing a positive sentiment overall, driven by significant achievements such as record adjusted EBITDA and robust growth in the electronics segment. Despite challenges like a decline in power electronics sales and a soft macroeconomic environment, the company remains optimistic about future growth and financial flexibility.

Element Solutions’ Earnings Call Highlights Growth Amid Challenges

The latest earnings call from Element Solutions painted a generally positive picture, highlighting strong performance and growth in the electronics and power electronics segments. Despite this optimistic outlook, the company acknowledged challenges such as a declining electronics EBITDA margin, macroeconomic uncertainties, and weaknesses in both the consumer electronics sector and the European market.

Element Solutions Reports Mixed Q2 2025 Results

Element Solutions Inc is a global specialty chemicals technology company that provides innovative solutions to enhance the performance of products across various industries, including consumer electronics, automotive systems, and semiconductor fabrication. In its second quarter of 2025, Element Solutions reported net sales of $625 million, marking a 2% increase from the previous year. However, the company faced a significant decline in net income, which fell by 49% to $48 million compared to the same period in 2024. Despite this, the company achieved a slight increase in adjusted EBITDA, reaching $136 million. The Electronics segment showed robust growth with a 12% increase in net sales, while the Industrial & Specialty segment experienced a decline due to divestitures. The company also repurchased 0.9 million shares of its common stock, reflecting confidence in its financial position. Looking ahead, Element Solutions remains optimistic about its ability to navigate global trade dynamics and expects its adjusted EBITDA for the full year 2025 to be between $530 million and $550 million, demonstrating resilience in a volatile market environment.