Element Solutions Inc
Element Solutions Inc Fundamental Analysis
Element Solutions Inc (ESI) shows weak financial fundamentals with a PE ratio of 44.91, profit margin of 7.48%, and ROE of 7.29%. The company generates $2.6B in annual revenue with moderate year-over-year growth of 5.30%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 43.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ESI's fundamental strength across five key dimensions:
Efficiency Score
WeakESI struggles to generate sufficient returns from assets.
Valuation Score
ModerateESI shows balanced valuation metrics.
Growth Score
ModerateESI shows steady but slowing expansion.
Financial Health Score
ExcellentESI maintains a strong and stable balance sheet.
Profitability Score
WeakESI struggles to sustain strong margins.
Key Financial Metrics
Is ESI Expensive or Cheap?
P/E Ratio
ESI trades at 44.91 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ESI's PEG of -2.22 indicates potential undervaluation.
Price to Book
The market values Element Solutions Inc at 3.20 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 16.32 times EBITDA. This signals the market has high growth expectations.
How Well Does ESI Make Money?
Net Profit Margin
For every $100 in sales, Element Solutions Inc keeps $7.48 as profit after all expenses.
Operating Margin
Core operations generate 13.41 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.29 in profit for every $100 of shareholder equity.
ROA
Element Solutions Inc generates $3.74 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Element Solutions Inc produces operating cash flow of $289.68M, showing steady but balanced cash generation.
Free Cash Flow
Element Solutions Inc produces free cash flow of $227.51M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.94 in free cash annually.
FCF Yield
ESI converts 2.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
44.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.22
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.20
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.36
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.61
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.68
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How ESI Stacks Against Its Sector Peers
| Metric | ESI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 44.91 | 27.41 | Worse (Expensive) |
| ROE | 7.29% | 859.00% | Weak |
| Net Margin | 7.48% | -120873.00% (disorted) | Weak |
| Debt/Equity | 0.61 | 0.51 | Neutral |
| Current Ratio | 3.68 | 4.80 | Strong Liquidity |
| ROA | 3.74% | -3590.00% (disorted) | Weak |
ESI outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Element Solutions Inc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
42.39%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
181.82%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
4179.74%
Industry Style: Cyclical, Commodity, Value
High Growth