Element Solutions Inc

Element Solutions maintains a capital structure characterized by significant leverage, with long-term debt of $2.06 billion against total equity of $2.74 billion, resulting in a debt-to-equity ratio of 0.75. The company holds $177.3 million in cash and equivalents, leading to a negative net cash position after subtracting total debt. Liquidity is supported by a current ratio of 2.68 and full availability of $408 million in unused borrowing capacity under its revolving credit facility. However, operating cash flow turned negative at -$66.6 million in Q1 2026, and free cash flow declined further to -$91.7 million, driven by capital expenditures of $25.1 million.

Profitability metrics indicate modest returns relative to the capital employed. Return on equity stands at 6.98%, while return on assets is 3.33%. The company generated $55.9 million in net income on $840 million in revenue, yielding a net margin of approximately 6.7%. Operating income was $111.4 million, suggesting an operating margin of roughly 13.3%. The valuation multiples reflect these fundamentals, with a price-to-earnings ratio of 49.9 and an EV/EBITDA of 23.11, indicating a premium valuation relative to earnings generation.

Revenue concentration is driven by the Electronics segment, which focuses on assembly solutions and electronic assembly materials used in circuit board and high-performance electronic device assembly. The company’s growth strategy is explicitly linked to demand in wireless mobile devices, internet infrastructure, high-performance computing, and the increasing use of electronics in automobiles. Goodwill and intangible assets are substantial, with total goodwill reaching $2.54 billion by March 31, 2026, following acquisitions of $296.6 million during the quarter.

Growth trajectory is supported by active M&A activity, with the company regularly pursuing targeted acquisitions to strengthen current businesses and expand product offerings. Inventory levels increased significantly from $294.7 million in December 2025 to $421.6 million in March 2026, reflecting a buildup in finished goods, work in process, and raw materials. This inventory expansion suggests preparation for increased demand or supply chain hedging, though it also ties up working capital.

Risk factors include medium liquidity and dilution risks. The company faces exposure to raw material costs, particularly precious metals, as well as fluctuations in foreign exchange rates and inflation. Regulatory impacts on privacy, cybersecurity, and global trade are cited as potential operational constraints. The negative free cash flow and reliance on debt financing create sensitivity to interest rate changes and credit market conditions.

Recent events highlight the company’s entry into the pre-earnings window for Q2 2026, with results expected on July 28, 2026. Analyst sentiment remains positive, with a mean recommendation of 2.10 (buy) and a median price target of $48.00, implying upside from the current market price of $39.07. The company remains in compliance with all debt covenants, providing stability in its financing structure.

This is the first analysis for Element Solutions Inc (ESI), establishing a baseline with no prior data for delta computation. Consequently, there are no material changes to report relative to previous periods, and the company currently has no analyst coverage or index memberships recorded in the system. The most significant activity involves a major holder change detected in late June 2026. On June 24, 2026, investor ID 587 reduced their position from 20,172 shares to 1,158 shares, a decrease in value from $0.69 million to $0.04 million. However, a subsequent detection on June 27, 2026, shows the same investor increasing their holdings back to 20,172 shares, restoring the position value to $0.69 million. Both transactions are dated as of March 31, 2026. Despite these significant shifts in a single investor's stake, broader market attention remains absent. Cross-source signal data indicates zero news dispatches for ESI between June 8 and June 28, 2026, suggesting a lack of recent public sentiment or media coverage surrounding the company during this period. The company's ownership structure includes 35 top holders, but with no officer count or analyst count recorded, the current data profile is limited. The volatility in investor ID 587's position highlights potential data reconciliation issues or rapid trading activity, but without additional context from the empty material changes log, the strategic significance of these moves remains unclear.

Element Solutions generated $2.55 billion in FY2025 revenue, reflecting a 2.6% compound annual growth rate since FY2023.

Long-term debt decreased to $1.63 billion in FY2025, indicating a deleveraging trend from $1.92 billion in FY2023.

The firm maintains a strong liquidity position with a current ratio of 3.68 as of late 2025.

Element Solutions carries a negative book value of $815 million, signaling potential equity impairment or accumulated losses.

The company faces medium-level risks regarding dilution, liquidity, and credit, according to internal risk flag assessments.

Revenue growth slowed to a 2.6% CAGR over two years, suggesting limited top-line expansion momentum.

Operating income growth was negligible at 0.5% year-over-year in the latest period, indicating margin pressure.

Revenue $840.0M; Operating income $111.4M.

• ▍Revenue $840.0M
• ▍Operating income $111.4M
• ▍Net margin 6.7%

Revenue $1.88B; Operating income $272.5M.

• ▍Revenue $1.88B
• ▍Operating income $272.5M
• ▍Net margin 9.9%

Revenue $1.22B; Operating income $171.7M.

• ▍Revenue $1.22B
• ▍Operating income $171.7M
• ▍Net margin 11.9%

Revenue $2.55B; Operating income $342.2M.

• ▍Revenue $2.55B
• ▍Operating income $342.2M
• ▍Net margin 7.5%

Revenue $2.46B; Operating income $343.9M.

• ▍Revenue $2.46B
• ▍Operating income $343.9M
• ▍Net margin 9.9%

Revenue $2.46B; Operating income $343.9M.

• ▍Revenue $2.46B
• ▍Operating income $343.9M
• ▍Net margin 9.9%

Revenue $2.33B; Operating income $173.6M.

• ▍Revenue $2.33B
• ▍Operating income $173.6M
• ▍Operating margin 7.4%

Revenue $2.33B; Operating income $173.6M.

• ▍Revenue $2.33B
• ▍Operating income $173.6M
• ▍Net margin 5.1%