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Solstice Advanced Materials, Inc. (SOLS)
NASDAQ:SOLS
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Solstice Advanced Materials, Inc.
(NASDAQ:SOLS)
Select Model
Select Model
Rating:69Neutral
Price Target:
$66.00
▲(0.66% Upside)
The score is driven primarily by solid financial quality (strong cash generation and low leverage) but moderated by declining profitability margins. Technically, the trend is strong, yet overbought indicators raise near-term risk. Valuation confidence is limited due to missing P/E and dividend yield data, and the latest earnings-call read-through is mixed given spin-off impacts and margin/cash-flow pressures despite improved guidance and strong orders.
Positive Factors
Strong cash conversion & FCF growth
High operating cash flow relative to net income and double-digit free cash flow growth indicate durable cash-generation capacity. This strengthens the company's ability to fund R&D, capex, debt servicing and strategic investments without relying on external financing, improving long-term resilience.
Low financial leverage, solid equity base
A very low debt-to-equity ratio and a high equity ratio signal conservative capital structure and financial flexibility. This reduces default and refinancing risk, allowing sustained investment through cycles and capacity to pursue strategic opportunities without materially increasing leverage.
Diversified, contract-driven revenue streams
Multiple revenue streams including long-term contracts and technology licensing create predictable, recurring cash flow and customer stickiness. Diversification across aerospace, automotive and electronics reduces single-market cyclicality and supports steady revenue visibility over multi-quarter horizons.
Negative Factors
Declining profitability margins
Sustained margin compression reduces internal funding for growth and weakens returns on invested capital. If driven by structural cost or pricing pressures, the decline limits ability to rebuild margins and could force trade-offs between pricing, investment and margin restoration over the medium term.
Modest revenue growth
Low single-digit top-line growth constrains scale benefits and limits headroom to absorb fixed costs or fund aggressive R&D and capex. In capital-intensive materials sectors, underwhelming revenue expansion can impede market share gains and slow recovery of compressed margins over multiple quarters.
Spin-off materially reduces scale and cash flow
A spin-off that meaningfully lowers sales and free cash flow shrinks the company's scale and financial cushion. This reduces investment bandwidth, may raise per-share volatility and creates execution risk during transition unless offset by clearer strategy or cost synergies post-separation.
Solstice Advanced Materials, Inc. (SOLS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.90B
Dividend YieldN/A
Average Volume (3M)3.35M
Price to Earnings (P/E)―
Beta (1Y)0.31
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees102,000
SectorTechnology
Sector Strength88
IndustryAsset Management
Share Statistics
EPS (TTM)0.53
Shares Outstanding158,727,460
10 Day Avg. Volume2,670,664
30 Day Avg. Volume3,353,861
Financial Highlights & Ratios
PEG Ratio-0.57
Price to Book (P/B)2.36
Price to Sales (P/S)2.04
P/FCF Ratio14.07
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue5.54
Enterprise Value/Gross Profit17.17
Enterprise Value/Ebitda26.19
Forecast
1Y Price Target
$68.83Price Target Upside4.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)2.91
Revenue Forecast (FY)$3.97B
Solstice Advanced Materials, Inc. Business Overview & Revenue Model
Company DescriptionSolstice Advanced Materials, Inc. operates as a specialty materials company. Its solutions enable industries and applications, including refrigerants, semiconductor manufacturing, data center cooling, alternative energy, protective fibers, healthcare packaging, and other. The company is based in Morris Plains, New Jersey.
How the Company Makes MoneySolstice Advanced Materials generates revenue through multiple streams, including the sale of advanced materials to various industries, contract manufacturing services, and licensing of its proprietary technologies. The company typically engages in long-term contracts with key clients in sectors like aerospace and automotive, providing a stable revenue base. Additionally, SOLS may collaborate with research institutions and other companies for joint development projects, which can lead to new product offerings and increased market reach. Strategic partnerships with industry leaders also enhance SOLS's credibility and market presence, driving further sales through co-marketing and distribution agreements.
Solstice Advanced Materials, Inc. Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
Honeywell displayed strong order growth and improved guidance, with notable successes in Aerospace and Building Automation. However, challenges remain in Energy and Sustainability Solutions and Industrial Automation margins, alongside the impact of the Solstice spin-off.Q3-2025 Updates
Positive Updates
Record Order Growth
Orders grew 22% organically to $11.9 billion, driven by broad-based growth across all four segments, with Aerospace and long-cycle energy projects leading the way.
Increased Guidance
Honeywell raised its 2025 EPS guidance for the third time this year despite the impact of the Solstice spin-off, showcasing strong performance and confidence in future growth.
Strong Aerospace Performance
Aerospace Technologies grew 12% organically, led by commercial aftermarket and Defense and Space, with orders showing strong double-digit growth across all markets.
Building Automation Growth
Building Automation delivered high single-digit growth, with organic sales increasing 7% driven by strength in both building solutions and products.
Quantinuum Capital Raise
Quantinuum completed a second capital raise at double the prior valuation, attracting partnerships with major companies like NVIDIA and JPMorgan.
Negative Updates
Energy and Sustainability Solutions Challenges
ESS segment faced a 2% organic decline due to licensing and catalyst delivery delays, with full-year margins expected to contract by roughly 1 point.
Industrial Automation Margin Pressure
Industrial Automation's segment margin declined 150 basis points to 18.8% due to inflationary pressures, despite a return to 1% organic growth.
Free Cash Flow Decline
Third-quarter free cash flow was down 16% from the prior year, influenced by capital expenditures timing and higher working capital requirements.
Impact of Solstice Spin-Off
The impending Solstice spin-off is expected to reduce 2025 sales by $700 million, adjusted EPS by $0.21, and free cash flow by $200 million.
Company Guidance
During the Honeywell Third Quarter 2025 Earnings Conference Call, the company provided guidance for the fourth quarter and updated its full-year 2025 outlook. Honeywell announced a raise in their full-year EPS guidance for the third time this year, despite the impact of the impending spin-off of Solstice Advanced Materials. The company reported that organic sales growth for the year is anticipated to be approximately 6%, with segment margin expected to increase by 30 to 40 basis points. For the fourth quarter, Honeywell projected organic sales growth between 8% and 10%, translating to sales of $10.1 billion to $10.3 billion, with anticipated segment margins ranging from 22.5% to 22.8%. The company also highlighted a 22% organic growth in orders, driven by strong performance across its four segments, which positions them well for future growth. Honeywell plans to reorganize its segments into four business units starting in 2026, as it continues to simplify its portfolio and drive long-term growth and margin expansion.Solstice Advanced Materials, Inc. Financial Statement Overview
Summary
Solid fundamentals supported by strong cash conversion (operating cash flow to net income 0.78; free cash flow growth 18.44%) and conservative leverage (debt-to-equity 0.13; equity ratio 65.10%). The main offset is weakening profitability, with net margin falling from 17.02% to 11.19% alongside declining EBIT/EBITDA margins.Income Statement
Solstice Advanced Materials, Inc. shows a modest revenue growth rate of 3.32% in the latest year, indicating steady expansion. However, there is a decline in profitability margins, with the net profit margin decreasing from 17.02% to 11.19%. The EBIT and EBITDA margins also show a downward trend, suggesting potential challenges in cost management or operational efficiency.72
Positive
Balance Sheet
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.13, indicating prudent financial leverage. The return on equity is healthy at 12.95%, although it has decreased from the previous year's 19.96%. The equity ratio stands at 65.10%, reflecting a solid equity base relative to total assets.78
Positive
Cash Flow
Solstice Advanced Materials, Inc. demonstrates positive cash flow dynamics with a free cash flow growth rate of 18.44%. The operating cash flow to net income ratio is robust at 0.78, suggesting efficient cash generation relative to earnings. The free cash flow to net income ratio is also strong at 0.65, indicating good cash conversion.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 1.88B | 3.77B | 3.65B |
| Gross Profit | 607.00M | 1.30B | 1.28B |
| EBITDA | 398.00M | 966.00M | 1.05B |
| Net Income | -74.00M | 422.00M | 621.00M |
Balance Sheet | |||
| Total Assets | 5.25B | 5.00B | 4.66B |
| Cash, Cash Equivalents and Short-Term Investments | 417.00M | 661.00M | 606.00M |
| Total Debt | 432.00M | 416.00M | 229.00M |
| Total Liabilities | 2.07B | 1.82B | 1.63B |
| Stockholders Equity | 3.23B | 3.26B | 3.11B |
Cash Flow | |||
| Free Cash Flow | 49.00M | 546.00M | 461.00M |
| Operating Cash Flow | 254.00M | 842.00M | 760.00M |
| Investing Cash Flow | -204.00M | -298.00M | -324.00M |
| Financing Cash Flow | -444.00M | -453.00M | -378.00M |
Solstice Advanced Materials, Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.18B | 14.15 | 11.10% | 3.34% | 14.48% | 34.97% | |
77 Outperform | $8.22B | 26.69 | 31.85% | 1.52% | 13.01% | 21.96% | |
74 Outperform | $8.65B | 18.78 | 15.95% | 0.01% | 1.08% | 8.24% | |
73 Outperform | $6.30B | 7.71 | 10.58% | 5.30% | ― | ― | |
69 Neutral | $9.90B | ― | ― | ― | ― | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
45 Neutral | $8.66B | -9.14 | -750.11% | 2.17% | 92.02% | -1386.34% |
* Technology Sector Average
SOLS
Solstice Advanced Materials, Inc.
65.57
17.17
35.48%
AMG
Affiliated Managers
313.58
126.01
67.18%
HLNE
Hamilton Lane
148.64
-6.38
-4.11%
JHG
Janus Henderson Group
48.05
6.41
15.39%
STEP
StepStone Group
73.19
10.77
17.25%
OTF
Blue Owl Technology Finance Corp.
13.26
-1.88
-12.42%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.