GICS Sector : Basic Materials
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.
Element Solutions reported a strong third quarter, with revenues growing 5% organically and adjusted EBITDA reaching a record $147 million, exceeding initial guidance of $140 million to $145 million. The company's EPS came in at $0.41, beating estimates of $0.39. The Electronics segment posted its sixth consecutive quarter of high single-digit organic growth, achieving a record level of revenue. Excluding the impact of pass-through metal sales, the adjusted EBITDA margin would have been 28%, a 100 basis point improvement year-over-year.
Publication Date: Oct -31
The Electronics segment was a key driver of the company's growth, with high single-digit organic growth and a record level of revenue. The addition of Micromax, a highly accretive strategic transaction, is expected to further enhance end-market diversification and increase opportunities for customer-led growth. The Industrial Solutions business also had a strong third quarter, with organic growth and mix favorability.
The acquisition of Micromax is expected to be highly accretive, with an EBITDA margin exceeding 40% on an ex-metals basis. The company expects to realize synergies over the next 12-18 months, driven by the depth of its connectivity in the supply chain. As Benjamin Gliklich stated, "the benefit of having this business inside of Element as opposed to where it's been most recently, is the depth of our connectivity in the supply chain, in particular, in the circuit board supply chain."
With a P/E Ratio of 26.24 and an EV/EBITDA multiple of 14.43, the market is pricing in a certain level of growth and profitability. The company's guidance for full-year 2025 adjusted EBITDA is between $545 million and $550 million, at the high end of the guidance range provided last quarter. As the company continues to execute on its strategy, investors will be watching for further progress on the integration of Micromax and the realization of synergies.
The company is optimistic about 2026, with growth in high-end electronics expected to continue. However, the outlook for automotive units, particularly EVs, is uncertain. The company sees opportunities for growth in power electronics, with a strong pipeline for Argomax into 2026 and beyond. Analysts estimate next year's revenue growth at 8.3%, indicating a positive outlook for the company's prospects.
Element Solutions Inc (ESI) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript
Dec -04
Edgestream Partners L.P. Acquires Shares of 145,817 Element Solutions Inc. $ESI
Dec -04
Element Solutions Inc (ESI) Presents at UBS Global Technology and AI Conference 2025 Transcript
Dec -02
Element Solutions Inc Announces Participation in December Conferences
Nov -20
Element Solutions Inc Announces Pricing and Preliminary Syndication of Add-On to Existing Term Loan B
Nov -20
3 Chemical Specialty Stocks to Escape Industry Challenges
Nov -13
Ensign Energy Services Inc. (ESI:CA) Q3 2025 Earnings Call Transcript
Nov -07
EFC Gases & Advanced Materials Announces Agreement to Join Element Solutions Inc.
Nov -06
Element Solutions Inc's Electronics segment growth is driven by increasing demand for electronic components in emerging technologies such as 5G, IoT, and electric vehicles. Additionally, the company's strategic acquisitions and expansion into high-growth markets, such as Asia, contribute to its 5.0% growth rate.
Element Solutions' Industrial & Specialty segment growth of 5.0% is driven by increasing demand for high-performance specialty chemicals in industrial applications, such as energy storage and electronics. Additionally, the company's strategic acquisitions and investments in R&D have expanded its product offerings and enhanced its market position, contributing to the segment's growth.
Element Solutions provides a range of electronic materials and chemicals used in the production of electronic components, including semiconductors, printed circuit boards, and displays.
The company offers a variety of surface finishing chemicals and materials used in the production of industrial components, including metal finishing, plating, and coating.
Element Solutions provides materials and chemicals used in the assembly and packaging of electronic components, including adhesives, coatings, and encapsulants.
The company offers a range of materials and chemicals used in the production of printed circuit boards, including laminates, prepregs, and solder masks.
Element Solutions provides photomasks used in the production of semiconductors and other electronic components.
The threat of substitutes for Element Solutions Inc is medium due to the presence of alternative products and services in the specialty chemicals industry.
The bargaining power of customers for Element Solutions Inc is low due to the company's diverse customer base and lack of concentration.
The bargaining power of suppliers for Element Solutions Inc is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.
The threat of new entrants for Element Solutions Inc is low due to the high barriers to entry in the specialty chemicals industry, including regulatory hurdles and capital requirements.
The intensity of rivalry for Element Solutions Inc is high due to the competitive nature of the specialty chemicals industry, with multiple players competing for market share.
| Value | |
|---|---|
| Debt Weight | 45.35% |
| Debt Cost | 3.95% |
| Equity Weight | 54.65% |
| Equity Cost | 10.55% |
| WACC | 7.56% |
| Leverage | 82.99% |
Value: 3.5
Growth: 6.3
Quality: 6.2
Yield: 2.0
Momentum: 5.0
Volatility: 6.7
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Value: 1.9
Growth: 5.6
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Yield: 1.0
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Yield: 3.0
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Value: 5.2
Growth: 3.2
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Yield: 5.0
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Volatility: 6.0
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Value: 7.8
Growth: 4.0
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Value: 6.6
Growth: 4.3
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Yield: 1.0
Momentum: 2.0
Volatility: 7.0
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