Element Solutions Inc

ESI

Miscellaneous Chemical Products

Mkt Cap

$5.82B

PE

44.36

Debt

$1.942B

Cash

$286.3M

EV

$7.476B

FCF

$275.7M

Market Cap

$5.82B

P/E Ratio

44.36

Debt

$1.942B

Cash

$286.3M

EV

$7.476B

FCF

$275.7M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-262600000},{"time":"2015-12-30","value":-308600000},{"time":"2016-12-30","value":-76700000},{"time":"2017-12-30","value":-296200000},{"time":"2018-12-30","value":-324400000},{"time":"2019-12-30","value":92200000},{"time":"2020-12-30","value":75700000},{"time":"2021-12-30","value":203300000},{"time":"2022-12-30","value":187200000},{"time":"2023-12-30","value":118100000}],"Sales":[{"time":"2014-12-30","value":843200000},{"time":"2015-12-30","value":2542300000},{"time":"2016-12-30","value":3585900000},{"time":"2017-12-30","value":3775900000},{"time":"2018-12-30","value":1961000000},{"time":"2019-12-30","value":1835900000},{"time":"2020-12-30","value":1853700000},{"time":"2021-12-30","value":2399800000},{"time":"2022-12-30","value":2549400000},{"time":"2023-12-30","value":2333200000}],"Net Margins":[{"time":"2014-12-30","value":-0.3114326375711575},{"time":"2015-12-30","value":-0.12138614640286355},{"time":"2016-12-30","value":-0.02138933043308514},{"time":"2017-12-30","value":-0.0784448740697582},{"time":"2018-12-30","value":-0.16542580316165223},{"time":"2019-12-30","value":0.05022060025055831},{"time":"2020-12-30","value":0.0408372444300588},{"time":"2021-12-30","value":0.08471539294941245},{"time":"2022-12-30","value":0.07342904212755942},{"time":"2023-12-30","value":0.05061717812446426}],"Assets":[{"time":"2014-12-30","value":4557600000},{"time":"2015-12-30","value":10190200000},{"time":"2016-12-30","value":10054100000},{"time":"2017-12-30","value":10252400000},{"time":"2018-12-30","value":9401500000},{"time":"2019-12-30","value":4324400000},{"time":"2020-12-30","value":4483400000},{"time":"2021-12-30","value":5138400000},{"time":"2022-12-30","value":4903700000},{"time":"2023-12-30","value":4974100000}],"Stockholders Equity":[{"time":"2014-12-30","value":2552600000},{"time":"2015-12-30","value":2273300000},{"time":"2016-12-30","value":2889800000},{"time":"2017-12-30","value":2860000000},{"time":"2018-12-30","value":2181100000},{"time":"2019-12-30","value":2220900000},{"time":"2020-12-30","value":2319800000},{"time":"2021-12-30","value":2500800000},{"time":"2022-12-30","value":2349100000},{"time":"2023-12-30","value":2344300000}],"ROE":[{"time":"2014-12-30","value":-0.10287549949071535},{"time":"2015-12-30","value":-0.13574979105265472},{"time":"2016-12-30","value":-0.026541629178489862},{"time":"2017-12-30","value":-0.10356643356643357},{"time":"2018-12-30","value":-0.14873229104580257},{"time":"2019-12-30","value":0.04151470124724211},{"time":"2020-12-30","value":0.032632123458918874},{"time":"2021-12-30","value":0.08129398592450415},{"time":"2022-12-30","value":0.07969009407858328},{"time":"2023-12-30","value":0.050377511410655634}],"ROA":[{"time":"2014-12-30","value":0.046559592768123576},{"time":"2015-12-30","value":0.007026358658318777},{"time":"2016-12-30","value":0.025203648262897723},{"time":"2017-12-30","value":0.021585189809215404},{"time":"2018-12-30","value":0.02643195234802957},{"time":"2019-12-30","value":0.05760336694107853},{"time":"2020-12-30","value":0.05190257393942097},{"time":"2021-12-30","value":0.05836447143079558},{"time":"2022-12-30","value":0.06633766339702674},{"time":"2023-12-30","value":0.034900786071852194}]}

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. This segment also supplies solder technologies, fluxes, cleaners, and other attachment materials for the electronics assembly industry; proprietary liquid chemical processes to manufacture printed circuit boards; and advanced copper interconnects, die attachment, wafer bump processes, and photomask technologies for integrated circuit fabrication and semiconductor packaging. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Element Solutions Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$275.7M	$320.2M	$368M	$418.3M	$470.3M	$522.9M	$574.9M	$625.1M	$671.8M	$713.7M	$749.4M	$7.494B
DCF		$278.5M	$278.2M	$275M	$268.9M	$260M	$248.6M	$235M	$219.6M	$202.9M	$185.2M	$1.852B
Value	$4.304B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 18%

Earnings Stability -26%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-12%	-2.1%	-7.8%	-17%	5%	4.1%	8.5%	7.3%	5.1%	5.6%
ROA	0.7%	2.5%	2.2%	2.6%	5.8%	5.2%	5.8%	6.6%	3.5%	3.8%
ROE	-14%	-2.7%	-10%	-15%	4.2%	3.3%	8.1%	8%	5%	5.6%

What is the average Net Margin?

The average Net Margin over the past 5 years is +2.24%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +3.41%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +4.93%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.21%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +2.28%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +3.31%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	22.55	58.14	67.45	-185.87	10.98	6.24	6.95	7.76	6.98	7.04
Debt Equity	2.37	1.85	1.94	2.49	0.70	0.66	0.78	0.82	0.84	0.83
MIN
Graham Stability	-	-	-	-	-	-	-	100%	76%	76%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 7.04.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 27.30.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.76.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	-6%	3.5%	8%	-8.5%	-14%
Net Income	-	-	16%	-37%	-23%
Stockholders Equity	-2.9%	1.5%	0.35%	-0.2%	-0.18%
FCF	17%	-	4.4%	13%	-8.5%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +3.54%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -14.12%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -23.35%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +1.45%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.18%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -8.54%.