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Element Solutions Inc (ESI)

NEUTRAL
Basic MaterialsSpecialty ChemicalsUnited States

Fundamental

59

Price

$35.30

Market Cap

$8.49B

Part 1 · What the company is worth

Overview

Element Solutions makes the specialty chemicals other manufacturers use as production inputs, not branded end products. Its two segments sell process chemistries: Electronics supplies the assembly, circuitry and semiconductor materials used to build printed circuit boards and chips, while Specialties supplies industrial surface finishing, automotive and offshore energy chemistries. Customers are electronics assemblers, chipmakers, automotive suppliers and industrial platers who build these chemicals into their own manufacturing lines.

How it makes money

Revenue comes from repeat sales of proprietary chemical formulations consumed in customers' production lines, not from one-off equipment sales. Because a chemistry is qualified into a specific manufacturing process before use, switching suppliers means re-validating the whole line, which discourages customers from changing. Electronics, tied to semiconductor and AI-infrastructure build-outs, has grown fastest; Specialties, exposed to automotive and industrial cycles, was the weaker segment in 2025, which also included the divestiture of the Graphics business.

Revenue by segment

Electronics70%

Assembly, circuitry and semiconductor process chemicals used to build printed circuit boards and chips, sold mainly into consumer electronics, data-centre and automotive electronics manufacturing.

Specialties30%

Industrial surface finishing, automotive systems and offshore energy chemistries; revenue declined in 2025, partly due to the divestiture of the Graphics business.

Competitive moat

Switching costs · Narrow

Element Solutions' chemistries are qualified into a customer's specific manufacturing process before use, and requalifying an alternative supplier's formulation means re-testing the whole production line. Legacy brands such as MacDermid Alpha and Enthone carry decades of qualification history with electronics and industrial customers, who weigh reliability and technical support alongside price when choosing a supplier.

What drives demand

Cyclical

Electronics revenue tracks semiconductor and consumer-electronics production cycles, now lifted by AI-infrastructure and data-centre build-outs, while Specialties tracks automotive and industrial output. Both are inputs to someone else's manufacturing volume rather than steady end-consumer demand, so orders rise and fall with customers' own production schedules and capital spending.

Key risks

  • Raw material and currency costs — The company sources chemical raw materials globally and states that price swings in these inputs and in currency exchange rates can pressure profitability if increases cannot be passed on to customers.
  • Environmental and remediation liabilities — Element Solutions has been named a potentially responsible party under federal and state Superfund-type laws at current and former plant and waste-management sites, and accrues for environmental liabilities when they are probable and estimable.
  • Competitive, technology-driven markets — The company operates in specialty chemicals markets it describes as highly competitive and subject to rapid technological change, where a customer can qualify a rival's formulation if performance or price falls behind.

The case for

Buyers argue that Electronics' exposure to AI-infrastructure and data-centre build-outs supports above-market growth, that qualification-driven switching costs protect share once a chemistry is designed into a customer's line, and that the agreed merger with Solstice Advanced Materials would create a larger, more diversified platform.

The case against

Sellers worry that Specialties remains exposed to a softer automotive and industrial cycle, that raw-material and currency swings can compress margins the company cannot fully pass through, and that the pending Solstice merger introduces integration and approval risk before any benefits arrive.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

No editorial profile for this company yet

No competitor list for this company yet.

Balance Sheet & Liquidity

Revenue

$2.80B

Trailing 12 months (through 3/31/2026)

Net Income

$149M

Trailing 12 months (through 3/31/2026)

Free Cash Flow

$228M

Total Equity

$2.67B

Total Liabilities

$2.41B

Current Ratio

2.68

Interest Coverage

6.21

Debt/EBITDA

4.37

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

Fairly Valued

Fair Value

$36.46

Current Price

$35.30

Margin of Safety

+3.2%

Fair Value Range

$24.93 - $48.00

Estimation Methods

Analyst Target:$46.75
DCF:$35.96
PE-based:$13.50
Graham Growth:$32.94
EPV:$10.88
Analyst Consensus:Buy (11B / 3H / 0S)
Last Earnings Surprise:+7.90%

Valuation Metrics

P/E Ratio

56.42

ROE

7.1%

P/B Ratio

3.12

P/FCF

70.48

Gross Margin

40.8%

ROIC

5.7%

Profitability Radar

Value Creation (Economic Moat)

ROIC

5.7%

WACC

9.8%

ROIC − WACC

-4.1 pp

ROIC is below the cost of capital — the company is destroying value for every dollar invested.

Fundamental Analysis Criteria

Passed (17)

  • EPS shows upward trend
  • Price CAGR 13.67%
  • ROIC 5.7%
  • Gross Margin 40.8%
  • Debt/Equity ratio
  • Operating Margin 13.4%
  • Positive Free Cash Flow
  • Current Ratio
  • Interest Coverage
  • Debt/EBITDA
  • Return on Tangible Assets
  • Revenue Growth 5Y 6.6%
  • Analyst Consensus 79% Buy
  • Earnings Surprise avg 4.6%
  • Earnings Quality (OCF/NI) 1.33
  • Share Dilution -0.1%
  • Piotroski F-Score 6/9

Failed (9)

  • P/FCF 70.48
  • P/B Ratio 3.12
  • CapEx intensity
  • Low reliance on intangibles
  • Price below Graham Number
  • DCF valuation (Overvalued)
  • ROE 6.6%
  • PEG Ratio 2.53
  • Net Margin Trend 5.3% vs 11.6%

Unavailable (1)

  • Dividend Payout NaN%

Piotroski F-Score

6/9

Mixed signals: some areas need attention

score
criteria

Earnings Quality

1.33

High quality: earnings backed by cash

Share Dilution

-0.1%

Buying back shares. Shareholder friendly

Governance

Executive Team

NameTitleAge
Mr. Benjamin GliklichCEO & Director40
Mr. Carey James DormanPresident of Enterprise Operations & CFO36
Mr. Richard L. FrickePresident of Electronics53
Mr. Matthew LiebowitzPresident of Specialties36
Mr. Michael RussnokChief Accounting Officer48
Ms. Caroline Simonne LindGeneral Counsel & Company Secretary-
Ms. Claudia IweorahSenior VP & Head of Human Resources-
Tom HunsingerVice President of Assembly Solutions-
Mr. Varun GokarnVice President of Strategy & Integration-

Audit Risk

9

Board Risk

3

Compensation Risk

10

Shareholder Rights Risk

4

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Latest News

Recent headlines for ESI, sourced from Markets Gazette.

No recent news for ESI.