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 (ESI) reported a strong financial performance for 2025, with net sales growing 6% organically to achieve a record year. The company's adjusted EBITDA for the year was $548 million, representing 7% constant currency growth, excluding the impact of the Graphics divestiture. The adjusted EBITDA margin would have been 26.5%, a 60-basis-point increase year-over-year, excluding net sales from assembly pass-through metals. The company's actual EPS came out at $0.37, beating estimates of $0.36.
Publication Date: 08:33
The Electronics segment was a key driver of growth, with net sales increasing 10% organically, led by high-end electronics growth, primarily from AI and data center investments. The Specialty segment saw a 250-basis-point margin expansion, driven by higher-value selling, supply chain initiatives, cost efficiencies, and portfolio optimization. The company's Circuitry business skews towards the highest-end circuit boards, which are growing well in excess of the market.
Element Solutions expects market conditions to largely resemble late 2025, with continued strength in high-performance computing and leading-edge electronics and slower industrial markets. The company expects adjusted EBITDA guidance of $650 million to $670 million, inclusive of the expected contributions from the EFC and Micromax acquisitions. Analysts estimate next year's revenue growth at 7.8%. The company's guide includes EFC as a $30 million EBITDA contributor in 2026.
With a P/E Ratio of 42.75 and EV/EBITDA of 18.55, Element Solutions is trading at a premium. The company's ROE (%) is 7.29, and ROIC (%) is 7.33. The Net Debt / EBITDA ratio is 2.03, indicating a moderate level of debt. The company's Free Cash Flow Yield (%) is 2.79, which is relatively attractive. The current valuation multiples suggest that the market is pricing in a certain level of growth, which Element Solutions is expected to deliver through its operational excellence and strategic acquisitions.
Element Solutions expects to continue to outgrow the market in 2026, driven by the success of Argomax and Kuprion. The company's Printed Circuit Board business has accelerated in recent years and is expected to outgrow the semi-assembly market in 2026. The semi-assembly market is expected to grow at a similar rate to 2025, and Element expects to outperform by a similar delta. With its strong track record of operational excellence and strategic acquisitions, Element Solutions is well-positioned for continued growth.
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Feb -18
Element Solutions Inc (ESI) Q4 2025 Earnings Call Transcript
Feb -18
Caprock Group LLC Acquires New Shares in Element Solutions Inc. $ESI
Feb -15
Element Solutions Inc. $ESI Shares Bought by Envestnet Asset Management Inc.
Feb -14
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Feb -07
Element Solutions Inc Announces Date for 2025 Fourth Quarter and Full Year Earnings Release
Feb -03
ESI Wraps Up Micromax Acquisition, Boosts Electronics Portfolio
Feb -03
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: 1.9
Growth: 5.4
Quality: 7.5
Yield: 1.0
Momentum: 4.0
Volatility: 9.3
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Value: 3.6
Growth: 6.2
Quality: 6.0
Yield: 2.0
Momentum: 4.5
Volatility: 6.7
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Value: 4.9
Growth: 4.9
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Yield: 3.0
Momentum: 2.5
Volatility: 7.7
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Value: 5.4
Growth: 3.2
Quality: 4.0
Yield: 7.0
Momentum: 1.5
Volatility: 6.0
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Value: 6.6
Growth: 4.3
Quality: 3.4
Yield: 1.0
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Volatility: 7.3
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Value: 7.7
Growth: 4.0
Quality: 3.3
Yield: 4.0
Momentum: 0.5
Volatility: 5.0
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