UL Solutions Inc. Class A (ULS) AI Stock Analysis

• Market Cap: $14.32B
• Dividend Yield: 0.67%
• Average Volume (3M): 984.33K
• Price to Earnings (P/E): 44.5
• Beta (1Y): 0.56
• Revenue Growth: 6.68%
• EPS Growth: 11.55%
• Country: US
• Employees: 14,813
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.53
• Shares Outstanding: 62,882,236
• 10 Day Avg. Volume: 859,736
• 30 Day Avg. Volume: 984,331
• PEG Ratio: -43.34
• Price to Book (P/B): 13.52
• Price to Sales (P/S): 5.73
• P/FCF Ratio: 43.42
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 5.40
• Enterprise Value/Gross Profit: 11.01
• Enterprise Value/Ebitda: 21.97
• 1Y Price Target: $92.17
• Price Target Upside: 11.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.07
• Revenue Forecast (FY): $3.22B

• Rating: 69 Neutral
• Price Target: $90.00 ▲(8.91% Upside)

The score is driven primarily by strong operating fundamentals (revenue growth and margin improvement) and a positive earnings outlook with guided margin expansion. These strengths are tempered by the cash flow risk flagged in the provided cash flow analysis and an expensive valuation (high P/E, low yield), while technicals remain generally supportive but with some momentum cooling (negative MACD).

Positive Factors

Consistent Revenue Growth

ULS has shown multi-year top-line expansion (from ~$2.3B in 2020 to ~ $3.05B/2025) driven by recurring testing, inspection and advisory demand across industrial and consumer end markets. That steady organic growth underpins durable revenue visibility and scale benefits over 2–6 months.

Sustained Margin Improvement

Material margin expansion reflects operating leverage, lower third‑party costs, and productivity programs. With management targeting 26.5%–27% EBITDA in 2026 and structural cost actions underway, improved profitability is likely sustainable, enhancing cash flow generation and reinvestment capacity.

Strategic CapEx and Lab Investments

Targeted investments in advanced labs align ULS with structural megatrends (energy transition, EVs, IoT, regulatory complexity), positioning it to capture higher‑value, differentiated testing and certification work. These durable assets support higher-margin services and long‑term client lock‑in.

Negative Factors

Free Cash Flow Volatility

Despite positive operating cash flow (~$600M in 2025), a sharp FCF reversal to negative in 2025 signals working‑capital swings or heavy reinvestment that can constrain funding flexibility. Persistent FCF volatility could pressure capital returns or force external financing within 2–6 months.

Portfolio Recasts Lower Recurring Revenue

Divesting the EHS software unit and exiting nonstrategic services trims the recurring software base and reduces scale in that segment. That structural shift lowers near‑term revenue comparability and requires redeployment of capital to sustain consolidated organic growth consistency.

Higher Tax Rate & Restructuring Costs

Implementation of OECD Pillar 2 and lost 2024 tax reserve benefits pushed the effective tax rate materially higher, reducing after‑tax earnings and cash flow. Combined with multi‑quarter restructuring costs, these structural headwinds will temper near‑term EPS conversion and complicate forecasting for 2–6 months.

UL Solutions Inc. Class A Business Overview & Revenue Model

Company Description

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.

How the Company Makes Money

UL Solutions generates revenue primarily through its comprehensive suite of testing and certification services. The company charges fees for testing products to ensure compliance with safety and performance standards, which can vary significantly depending on the complexity and volume of testing required. Additionally, ULS earns income from consulting services that assist organizations in navigating regulatory frameworks and improving product safety and sustainability practices. Strategic partnerships with industry stakeholders, regulatory bodies, and manufacturers enhance its market reach and reliability, further driving revenue growth. Furthermore, ULS invests in research and development to expand its service offerings, thereby creating new revenue streams while maintaining its competitive edge in the safety science sector.

UL Solutions Inc. Class A Financial Statement Overview

Summary

Strong operating performance with accelerating revenue and improving margins, and leverage has recently improved. The key offset is cash flow volatility highlighted by the sharp 2025 free cash flow deterioration in the provided cash flow analysis, which raises near-term funding flexibility risk despite solid operating cash flow.

Income Statement

Revenue has grown steadily from $2.30B (2020) to $3.05B (2025), with a sharp acceleration in 2025. Profitability is consistently healthy for the sector, with gross margin improving to ~49% (2025) and operating profitability also trending up (EBITDA margin ~24.6%, EBIT margin ~16.9%). Net margin remains solid (~10–11%), though it softened modestly in 2025 versus 2024, suggesting some cost or mix pressure despite strong top-line momentum.

Balance Sheet

Leverage looks improved recently: debt-to-equity declined from elevated levels in 2023–2024 (above 1x) to ~0.53x in 2025 as equity increased. Returns on equity are strong (mid-20%+ in 2025, higher in prior years), indicating efficient capital use. The main watch-out is that the company has shown meaningful swings in capital structure over time (very low leverage in 2020–2021, then higher in 2023–2024), which can add risk if the higher-debt posture returns.

Cash Flow

Operating cash flow is consistently positive and has grown to $600M in 2025, supporting earnings quality. However, free cash flow deteriorated sharply to -$197M in 2025 after multiple years of positive free cash flow, implying a heavy reinvestment year and/or working-capital drag. Cash conversion remains a moderate constraint, with operating cash flow running below net income in recent years, and the 2025 free cash flow reversal is the key near-term risk to funding flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.05B	2.87B	2.68B	2.52B	2.52B
Gross Profit	1.50B	1.38B	1.26B	1.21B	1.18B
EBITDA	751.00M	642.00M	535.00M	535.00M	417.00M
Net Income	329.00M	326.00M	260.00M	293.00M	224.00M
Balance Sheet
Total Assets	2.92B	2.80B	2.74B	2.72B	3.66B
Cash, Cash Equivalents and Short-Term Investments	295.00M	298.00M	315.00M	373.00M	1.38B
Total Debt	832.00M	935.00M	1.06B	660.00M	154.00M
Total Liabilities	1.63B	1.87B	2.06B	1.64B	1.33B
Stockholders Equity	1.29B	904.00M	654.00M	1.05B	2.31B
Cash Flow
Free Cash Flow	403.00M	287.00M	252.00M	208.00M	314.00M
Operating Cash Flow	600.00M	524.00M	467.00M	372.00M	421.00M
Investing Cash Flow	-204.00M	-234.00M	-175.00M	-238.00M	178.00M
Financing Cash Flow	-396.00M	-284.00M	-294.00M	-1.12B	-228.00M

UL Solutions Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ULS, the sentiment is Positive. The current price of 82.64 is above the 20-day moving average (MA) of 71.97, above the 50-day MA of 76.20, and above the 200-day MA of 73.56, indicating a bullish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 66.82 is Neutral, neither overbought nor oversold. The STOCH value of 65.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ULS.

UL Solutions Inc. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULS	69 Neutral	$14.32B	44.53	29.48%	0.67%	6.68%	11.55%
GPN	68 Neutral	$22.75B	14.61	4.92%	1.25%	-11.30%	34.28%
ARMK	68 Neutral	$10.56B	33.77	10.08%	1.14%	6.35%	24.07%
RTO	66 Neutral	$15.54B	47.85	5.86%	2.20%	1.56%	-32.50%
CBZ	66 Neutral	$1.62B	19.67	7.44%	―	59.19%	-35.47%
MMS	64 Neutral	$4.11B	11.45	22.09%	1.38%	2.36%	11.30%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

UL Solutions Inc. Class A Corporate Events

UL Solutions Inc. Completes Stock Sale Agreement

On December 3, 2025, UL Solutions Inc. entered into an underwriting agreement with Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC for the sale of 12,500,000 shares of its Class A common stock at $78.00 per share. The offering, which closed on December 5, 2025, did not provide any proceeds to the company, as the shares were sold by a selling stockholder. The selling stockholder also granted the underwriters a 30-day option to purchase an additional 1,875,000 shares.

The most recent analyst rating on (ULS) stock is a Buy with a $101.00 price target. To see the full list of analyst forecasts on UL Solutions Inc. Class A stock, see the ULS Stock Forecast page.