📊 ESI Key Takeaways
Is Element Solutions Inc (ESI) a Good Investment?
Element Solutions exhibits critical cash generation deficiencies and inadequate debt servicing capacity. Despite $840M in revenue with positive net income of $55.9M, the company generated negative operating cash flow of -$66.6M and negative free cash flow of -$91.7M, indicating severe earnings quality issues. An interest coverage ratio of 0.8x reveals the company cannot service debt obligations from operations, creating material financial stress.
Element Solutions shows solid underlying profitability with a 42.0% gross margin, 13.4% operating margin, and a strong liquidity position. However, growth quality looks weak because the reported revenue surge is not translating into better net income, EPS declined materially, and cash generation deteriorated to negative free cash flow. The fundamentals support balance-sheet stability, but weak cash conversion and thin interest coverage limit conviction.
Why Buy Element Solutions Inc Stock? ESI Key Strengths
- Gross margin of 38.4% is respectable for specialty chemicals sector
- Operating margin of 13.3% demonstrates core business profitability at scale
- Strong liquidity with current ratio of 2.68x and quick ratio of 1.91x provides near-term flexibility
- Moderate leverage at 0.75x debt-to-equity avoids extreme financial risk
- Healthy gross and operating margins indicate resilient core economics
- Strong liquidity with $626.5M of cash and a 3.68x current ratio supports financial flexibility
- Moderate leverage with 0.61x debt-to-equity keeps the balance sheet manageable
ESI Stock Risks: Element Solutions Inc Investment Risks
- Negative operating cash flow of -$66.6M and free cash flow of -$91.7M signal poor earnings quality and cash conversion
- Interest coverage of 0.8x indicates inability to service debt from operations, creating refinancing risk
- Return on equity of 2.0% and ROA of 1.0% reflect severe capital inefficiency despite large asset base
- EPS declined 21.8% YoY while net income was flat, suggesting operational deterioration and dilution
- Revenue growth of 4877% YoY lacks credibility as organic growth and suggests acquisition-driven results masking underlying business weakness
- Operating cash flow of only $26.0M and negative free cash flow suggest weak earnings-to-cash conversion
- Interest coverage of 2.3x leaves limited cushion if financing costs stay elevated or profits soften
- Reported revenue growth appears low quality because net income was flat and diluted EPS fell 21.8%
Key Metrics to Watch
- Operating cash flow trend and path to positive FCF generation
- Interest coverage ratio improvement and debt refinancing capacity
- Return on equity recovery and capital deployment efficiency
- Organic revenue growth excluding acquisition impacts and net income sustainability
- Operating cash flow and free cash flow recovery
- Interest coverage and net income per diluted share
Element Solutions Inc (ESI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.68x current ratio provides a solid financial cushion.
ESI Profit Margin, ROE & Profitability Analysis
ESI vs Materials Sector: How Element Solutions Inc Compares
How Element Solutions Inc compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Element Solutions Inc Stock Overvalued? ESI Valuation Analysis 2026
Based on fundamental analysis, Element Solutions Inc has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Element Solutions Inc Balance Sheet: ESI Debt, Cash & Liquidity
ESI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Element Solutions Inc's revenue has shown modest growth of 6% over the 5-year period. The most recent EPS of $0.49 reflects profitable operations.
ESI Revenue Growth, EPS Growth & YoY Performance
ESI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $593.7M | $55.9M | $0.23 |
| Q3 2025 | $645.0M | $39.3M | $0.16 |
| Q2 2025 | $612.7M | $47.4M | $0.20 |
| Q1 2025 | $575.0M | N/A | $0.23 |
| Q3 2024 | $599.3M | -$31.8M | $-0.13 |
| Q2 2024 | $586.1M | $29.9M | $0.12 |
| Q1 2024 | $574.4M | $42.9M | $0.18 |
| Q3 2023 | $599.3M | -$31.8M | $-0.13 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Element Solutions Inc Dividends, Buybacks & Capital Allocation
ESI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Element Solutions Inc (CIK: 0001590714)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778012246.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778012232.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778012222.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778012215.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778012205.xml | View → |
❓ Frequently Asked Questions about ESI
What is the AI rating for ESI?
Element Solutions Inc (ESI) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 84% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ESI's key strengths?
Claude: Gross margin of 38.4% is respectable for specialty chemicals sector. Operating margin of 13.3% demonstrates core business profitability at scale. ChatGPT: Healthy gross and operating margins indicate resilient core economics. Strong liquidity with $626.5M of cash and a 3.68x current ratio supports financial flexibility.
What are the risks of investing in ESI?
Claude: Negative operating cash flow of -$66.6M and free cash flow of -$91.7M signal poor earnings quality and cash conversion. Interest coverage of 0.8x indicates inability to service debt from operations, creating refinancing risk. ChatGPT: Operating cash flow of only $26.0M and negative free cash flow suggest weak earnings-to-cash conversion. Interest coverage of 2.3x leaves limited cushion if financing costs stay elevated or profits soften.
What is ESI's revenue and growth?
Element Solutions Inc reported revenue of $840.0M.
Does ESI pay dividends?
Element Solutions Inc pays dividends, with $20.2M distributed to shareholders in the trailing twelve months.
Where can I find ESI SEC filings?
Official SEC filings for Element Solutions Inc (CIK: 0001590714) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ESI's EPS?
Element Solutions Inc has a diluted EPS of $0.23.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ESI a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Element Solutions Inc has a SELL rating with 84% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is ESI stock overvalued or undervalued?
Valuation metrics for ESI: ROE of 2.0% (sector avg: 14%), net margin of 6.7% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy ESI stock in 2026?
Our dual AI analysis gives Element Solutions Inc a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ESI's free cash flow?
Element Solutions Inc's operating cash flow is $-66.6M, with capital expenditures of $25.1M. FCF margin is -10.9%.
How does ESI compare to other Materials stocks?
Vs Materials sector averages: Net margin 6.7% (avg: 10%), ROE 2.0% (avg: 14%), current ratio 2.68 (avg: 1.6).