# Element Solutions (ESI.US)

Canonical: https://gigainvestors.com/s/ESI

Analysis as of: 2026-10-16T07:28:20.902Z. Financial observations: FY2011–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $35.53 per share; close as of 2026-10-15.

Estimated value: low $17.19 per share, central $19.48 per share, high $22.54 per share. Buy at or below the central value $19.48 per share. Valuation as of 2026-10-16T07:28:20.902Z; scenarios are not confidence intervals.

Expected annual return: 6.7% at the stated quote. About 6.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 2

- Operating margin variation: 0.22×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.06×

- FY2018: 0.13×

- FY2019: 0.14×

- FY2020: 0.13×

- FY2021: 0.12×

- FY2022: 0.13×

- FY2023: 0.07×

- FY2024: 0.14×

- FY2025: 0.13×

- LTM to Jun 2026: 0.13×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 12.4%

- ROIC, second-lowest year: 3.7%

- Typical minus recent gross margin: 0.1 pp

- Typical gross margin (annual median): 42.1%

- Recent gross margin (lower of latest and 3-year median): 42.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: 5.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 3.7%

- FY2017: 3.2%

- FY2018: 3.9%

- FY2019: 11.3%

- FY2020: 16.4%

- FY2021: 15.2%

- FY2022: 13.6%

- FY2023: 9.0%

- FY2024: 16.2%

- FY2025: 23.6%

### economics: pass

- Owner earnings / net income, 5-yr: 1.52×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.4B

- Net income, five-year total: $919M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.5 pp

- Working capital / revenue, change between three-year averages: 2.7 pp

- Working capital / revenue, final three-year average: 26.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.61×

- FY2023: 1.97×

- FY2024: 1.37×

- FY2025: 1.47×

- LTM to Jun 2026: 1.43×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 3.7% vs 16.2%

- Per-share earnings: -1.04 to 0.79 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.8%

- Ordinary dilution, 5-year annual growth: -0.6%

- Market cap gain: $3.3B

- Cumulative retained earnings: -$331M

- Diluted shares, 10-year annual growth: 1.8%

- Diluted shares, 5-year annual growth: -0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $1.82

- Per-share value, starting three-year median: -$1.04

- Per-share value, ending three-year median: $0.79

- Buybacks concentrated in cheaper years (correlation): -0.36

- Average buyback yield: 5.6%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: $410M

- Cumulative net income, 10 years: $417M

- ROIC, first three-year median: 3.7%

- ROIC, last three-year median: 16.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.27

- FY2017: -$1.04

- FY2018: -$1.13

- FY2019: $0.35

- FY2020: $0.30

- FY2021: $0.82

- FY2022: $0.76

- FY2023: $0.49

- FY2024: $1.01

- FY2025: $0.79

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -1.9%

- Receivables to sales index (DSRI): 1.13×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 20.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.52×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.6%

- FY2017: -4.4%

- FY2018: -3.4%

- FY2019: 1.9%

- FY2020: -4.1%

- FY2021: -2.4%

- FY2022: -2.3%

- FY2023: -4.4%

- FY2024: -2.4%

- FY2025: -1.9%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 26% since Jun 2026 · "Element Solutions (ESI): Margin Narrowing Challenges High-Growth Narrative Despite Earnings Outlook" (finance.yahoo.com, Oct 2025) · sales +23.5%

Story as of 2026-10-16T09:58:42.668Z; price observation 2026-10-15.

Price needs cash profits to grow 8.6% a year for ten years

- 2025-07-07: Element Solutions raises 2025 guidance on strong data center demand ([investing.com](https://www.investing.com/news/company-news/element-solutions-raises-2025-guidance-on-strong-data-center-demand-93CH-4124774))

- 2025-10-30: Element Solutions (ESI): Margin Narrowing Challenges High-Growth Narrative Despite Earnings Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/element-solutions-esi-margin-narrowing-120904410.html))

- 2026-04-28: Element Solutions Inc Reports Record Quarterly Results and Increases 2026 Full Year Guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/element-solutions-inc-reports-record-201500580.html))

### Sales · FY2025–2026

sales +23.5%; source https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm; observed 2026-02-18.

- FY2017: $3.8B 

- FY2018: $2.0B 

- FY2019: $1.8B 

- FY2020: $1.9B 

- FY2021: $2.4B 

- FY2022: $2.5B 

- FY2023: $2.3B 

- FY2024: $2.5B 

- FY2025: $2.6B 

- FY2026: $3.2B 

### Gross margin · FY2025

gross margin 42%; source https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm; observed 2026-02-18.

- FY2016: 42.1% 

- FY2017: 42.1% 

- FY2018: 42.7% 

- FY2019: 42.9% 

- FY2020: 42.4% 

- FY2021: 40.0% 

- FY2022: 37.4% 

- FY2023: 39.4% 

- FY2024: 42.2% 

- FY2025: 42.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty chemicals; annual sales are USD 2.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); FY2025: revenue 2551200000; grossProfit 1070500000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ESI.US: Element Solutions Inc operates as a specialty chemicals technology company in the United States, China, and internationally. The company operates in two segments: MacDermid Alpha Electronics Solutions and Element Specialties. Its MacDermid Alpha Electronics Solutions segment provides assembly solutions, including surface mount technologies, pastes fluxes, thermal management materials, coatings, and other attachment materials; circuitry solutions, such as circuit board metallization, circuit formation products, electronic materials, surface finishes, and film and smart surface solutions; and semiconductor solutions, which includes semiconductor assembly and wafer level packaging materials. This segment serves the mobile communications, computers, automobiles, and aerospace equipment industries. The Element Specialties segment offers industrial solutions, including electroless nickel, plating products, pre-treatment and cleaning solutions, functional conversion coatings, and water treatment; and energy solutions, which includes offshore fluids. This segment serves the aerospace, automotive, construction, consumer electronics, 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 based in Miami Beach, Florida.

### Why customers stay

Margins ranged from 39.4% to 42.2% during 2023–25; it earns 12.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: grossProfit / revenue = 39.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: grossProfit / revenue = 42.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); FY2025: grossProfit / revenue = 42%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); 10-year return on capital observations [[2016,0.03687842500507408],[2017,0.03202018351984469],[2018,0.03872854606431249],[2019,0.11286421302105117],[2020,0.1635703846457996],[2021,0.15223031127029668],[2022,0.13605852342770067],[2023,0.09034140242855923],[2024,0.1615561216339231],[2025,0.23624439074905074]]; median 0.12446136822437592. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

"Pass-through metals pricing had a positive impact of 8% on reported net sales." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); Pass-through metals pricing had a positive impact of 8% on reported net sales.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 25 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2016: growth capex 0; upkeep 56000000; owner earnings 212300000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2019: growth capex 0; upkeep 29700000; owner earnings 217200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2020: growth capex 0; upkeep 28800000; owner earnings 208300000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2021: growth capex 0; upkeep 46300000; owner earnings 320900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2022: growth capex 0; upkeep 47800000; owner earnings 300700000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: growth capex 0; upkeep 52700000; owner earnings 232100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: growth capex 0; upkeep 68400000; owner earnings 333400000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); FY2025: growth capex 0; upkeep 62200000; owner earnings 279800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Dividend observations: [[2016,3355000000],[2017,3500000],[2018,12400000],[2019,12400000],[2020,12400000],[2021,61900000],[2022,78400000],[2023,77400000],[2024,78200000],[2025,77800000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); FY2025: cash repurchases 25000000 USD.

### Are managers owners

Insiders own 6.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ESI.US SharesStats.PercentInsiders = 6.526 percentage points; cache date 2026-10-16.

### What could break it

Restrictions on exports to China could cut sales.

- Source: https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm (filed 2026-02-18); n on the movement of funds, potentially leading to the inability to readily repatriate earnings from foreign operations effectively;

•natural disasters, extreme weather events, regional or global health concerns;

•establishing and maintaining relationships with local distributors and OEMs;

•governmental regulations and/or sanctions affecting the import and export of products, including global trade barriers, additional taxes, countervailing tariffs, tariff increases, cash repatriation restrictions, retaliations and boycotts between the U.S. and other countries, including Mexico, Russia and China;

•import and export control and licensing requirements; risk of non-compliance with the Foreign Corrupt Practices Act of 1977, U.S. export control and trade sanction laws, SEC rules regarding conflict minerals sourcing and other similar anti-corruption and international trade laws or regulations in other jurisdictions;

•greater difficulty in safeguarding intellectual property than in the U.S.;

•difficulty in staffing and managing geographically diverse operations and ensuring compliance with our policies and procedures; and

•challenges in maintaining an effective internal control environment, including language and cultural differences, varying levels of GAAP expertise and internal control over financial reporting.

In addition, changes in policies by the U.S. or foreign governments could negatively affect our operating results, supply chain and competitive position due to changes in duties, tariffs, trade regulations, employment regulations, taxes, or limitations on currency or fund transfers. Tariffs and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have imposed and may continue to impose new tariffs, trade restrictions and export restrictions, which may negatively impact end-user demand or restrict our ability to sell products. If we are unable to successfully manage these and/or any of the risks listed above, we could experience a loss of sales and profitability and/or an impairment or loss of assets, any of which could have a material adverse impact on our business, financial condition or results of operations.

Failure to attract and retain key personnel, including our executive officers, or effectively manage succession could have an adverse impact on our business, financial condition or results of operations.

Our business involves complex operations. As a result, our success depends to a significant degree on the skills, experience and efforts of our executive management and other key personnel as well as their ability to provide uninterrupted leadership and strategic direction. In addition, due to the specialized and technical nature of our business, our future performance depends upon our ability to attract, develop and retain s

### What the price says

The price assumes cash profits grow 8.6% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Ten-year compound average after fade. Initial solved rate 0.11053108297995895. Price 35.53; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.5191929133858267 → FY2025 1.1542904290429044. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $7.29 per share

- 2016-11: $9.35 per share

- 2016-12: $9.81 per share

- 2017-01: $12.14 per share

- 2017-02: $13.19 per share

- 2017-03: $13.02 per share

- 2017-04: $14.17 per share

- 2017-05: $12.48 per share

- 2017-06: $12.68 per share

- 2017-07: $14.01 per share

- 2017-08: $11.68 per share

- 2017-09: $11.15 per share

- 2017-10: $10.70 per share

- 2017-11: $9.95 per share

- 2017-12: $9.92 per share

- 2018-01: $11.71 per share

- 2018-02: $10.44 per share

- 2018-03: $9.63 per share

- 2018-04: $10.07 per share

- 2018-05: $12.06 per share

- 2018-06: $11.60 per share

- 2018-07: $12.36 per share

- 2018-08: $13.26 per share

- 2018-09: $12.47 per share

- 2018-10: $10.82 per share

- 2018-11: $11.77 per share

- 2018-12: $10.33 per share

- 2019-01: $11.24 per share

- 2019-02: $11.26 per share

- 2019-03: $10.10 per share

- 2019-04: $10.86 per share

- 2019-05: $9.46 per share

- 2019-06: $10.34 per share

- 2019-07: $10.02 per share

- 2019-08: $9.33 per share

- 2019-09: $10.18 per share

- 2019-10: $10.86 per share

- 2019-11: $11.69 per share

- 2019-12: $11.68 per share

- 2020-01: $11.70 per share

- 2020-02: $10.39 per share

- 2020-03: $8.36 per share

- 2020-04: $10.25 per share

- 2020-05: $10.89 per share

- 2020-06: $10.85 per share

- 2020-07: $10.86 per share

- 2020-08: $10.75 per share

- 2020-09: $10.51 per share

- 2020-10: $11.72 per share

- 2020-11: $13.81 per share

- 2020-12: $17.73 per share

- 2021-01: $17.03 per share

- 2021-02: $18.05 per share

- 2021-03: $18.29 per share

- 2021-04: $21.88 per share

- 2021-05: $23.39 per share

- 2021-06: $23.38 per share

- 2021-07: $23.39 per share

- 2021-08: $22.73 per share

- 2021-09: $21.68 per share

- 2021-10: $22.71 per share

- 2021-11: $22.87 per share

- 2021-12: $24.28 per share

- 2022-01: $22.44 per share

- 2022-02: $24.58 per share

- 2022-03: $21.90 per share

- 2022-04: $20.62 per share

- 2022-05: $21.29 per share

- 2022-06: $17.80 per share

- 2022-07: $19.76 per share

- 2022-08: $18.67 per share

- 2022-09: $16.27 per share

- 2022-10: $17.20 per share

- 2022-11: $19.56 per share

- 2022-12: $18.19 per share

- 2023-01: $20.48 per share

- 2023-02: $20.54 per share

- 2023-03: $19.31 per share

- 2023-04: $18.15 per share

- 2023-05: $17.93 per share

- 2023-06: $19.20 per share

- 2023-07: $20.96 per share

- 2023-08: $20.62 per share

- 2023-09: $19.61 per share

- 2023-10: $18.23 per share

- 2023-11: $20.96 per share

- 2023-12: $23.14 per share

- 2024-01: $22.23 per share

- 2024-02: $23.50 per share

- 2024-03: $24.98 per share

- 2024-04: $23.13 per share

- 2024-05: $24.03 per share

- 2024-06: $27.12 per share

- 2024-07: $26.95 per share

- 2024-08: $26.74 per share

- 2024-09: $27.16 per share

- 2024-10: $27.10 per share

- 2024-11: $28.68 per share

- 2024-12: $25.43 per share

- 2025-01: $25.81 per share

- 2025-02: $26.11 per share

- 2025-03: $22.61 per share

- 2025-04: $20.41 per share

- 2025-05: $21.38 per share

- 2025-06: $22.65 per share

- 2025-07: $23.60 per share

- 2025-08: $25.72 per share

- 2025-09: $25.17 per share

- 2025-10: $26.72 per share

- 2025-11: $25.92 per share

- 2025-12: $24.99 per share

- 2026-01: $29.10 per share

- 2026-02: $35.09 per share

- 2026-03: $34.14 per share

- 2026-04: $42.59 per share

- 2026-05: $42.43 per share

- 2026-06: $47.75 per share

- 2026-07: $36.73 per share

- 2026-08: $35.54 per share

- 2026-09: $36.28 per share

- 2026-10: $35.53 per share

## Annual estimated value (USD per share)

- FY2016: low $8.04 per share, central $8.97 per share, high $10.21 per share

- FY2020: low $5.82 per share, central $6.48 per share, high $7.36 per share

- FY2021: low $13.03 per share, central $14.67 per share, high $16.85 per share

- FY2022: low $14.24 per share, central $16.09 per share, high $18.54 per share

- FY2023: low $13.44 per share, central $15.16 per share, high $17.44 per share

- FY2024: low $14.34 per share, central $16.14 per share, high $18.53 per share

- FY2025: low $15.94 per share, central $17.81 per share, high $20.30 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1590714/000159071426000018/esi-20251231.htm); period 2025-12-31, filed 2026-02-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.