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

• Market Cap: $14.16B
• Dividend Yield: 0.74%
• Average Volume (3M): 635.22K
• Price to Earnings (P/E): 42.0
• Beta (1Y): 0.59
• Revenue Growth: 6.84%
• EPS Growth: 29.09%
• Country: US
• Employees: 14,813
• Sector: General
• Sector Strength: N/A
• Industry: Specialty Business Services
• EPS (TTM): 0.37
• Shares Outstanding: 62,368,950
• 10 Day Avg. Volume: 582,807
• 30 Day Avg. Volume: 635,215
• PEG Ratio: 0.76
• Price to Book (P/B): 6.63
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.60
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 2.97
• 1Y Price Target: $71.13
• Price Target Upside: 0.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 74 Outperform
• Price Target: $81.00 ▲(14.71%Upside)

UL Solutions Inc. scores well primarily due to its strong financial performance and positive technical indicators. While the financial health is robust, the high P/E ratio suggests potential overvaluation. Absence of recent earnings call data and corporate events does not affect the overall assessment significantly.

Positive Factors

Financial performance

First-quarter results came in nicely above expectations with top-line upside and solid cost control driving improved margins and earnings.

Management performance

Management's execution continues to exceed consensus expectations, driving adj. diluted EPS up approximately 20% from 2024 to 2026.

Market position

ULS is the only U.S. listed TIC player, providing it with scarcity value.

Negative Factors

Competitive risks

Risks include operating in a highly competitive market, exposure to geopolitical uncertainty, exposure to end-market cyclicality, and increased near-term capital expenditures.

Earnings forecast

We cut our 2025E adj. EPS to $1.76 from $1.8, principally due to 2024 coming in c.2.5% below our expectations, especially in Consumer.

Valuation concerns

The downgrade is purely on valuation grounds, with the gap to the multiples on which its peers trade being too high to justify a Buy rating.

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 Inc. makes money primarily through its testing, inspection, and certification services. The company charges fees for evaluating products against safety and regulatory standards, which is essential for manufacturers to gain market access in various regions. Key revenue streams include product testing services, certification, and inspection fees. Additionally, UL Solutions generates income through training and advisory services, helping companies navigate complex compliance landscapes. Strategic partnerships with industry leaders and government agencies enhance its service offerings and expand its market reach, contributing to its earnings.

UL Solutions Inc. Class A Financial Statement Overview

Summary

UL Solutions Inc. demonstrates strong financial health with robust revenue and profit margins. The income statement shows a healthy net profit margin and EBIT/EBITDA ratios. Although moderate leverage is noted, the balance sheet remains stable. Cash flow generation is strong, supporting liquidity and future growth.

Income Statement

UL Solutions Inc. has demonstrated strong performance in its income statement, with a consistent upward trajectory in total revenue, reaching $2.905 billion TTM. The gross profit margin for TTM stands at approximately 48.7%, indicating efficient cost management. The net profit margin has also shown improvement, now at 11.6% TTM. Revenue growth rate from 2024 to TTM is modest at 1.2%, but the EBIT and EBITDA margins are healthy, at 16.5% and 22.1% TTM, respectively. Overall, the company's income statement reflects strong profitability and stability.

Balance Sheet

The balance sheet of UL Solutions Inc. exhibits a solid equity base with stockholders' equity at $970 million TTM. The debt-to-equity ratio is 0.87 TTM, indicating moderate leverage, which is a potential risk factor but still manageable. Return on equity has improved to 34.8% TTM, demonstrating effective use of equity capital. The equity ratio is 33.7% TTM, showing a balanced approach between debt and equity financing. The company's balance sheet indicates a stable financial position with a slight concern over increasing debt levels.

Cash Flow

Cash flow generation remains strong for UL Solutions Inc., with operating cash flow reaching $537 million TTM, reflecting robust cash generation capabilities. The free cash flow growth rate from 2024 to TTM is 6.6%, indicating positive cash flow dynamics. The operating cash flow to net income ratio is 1.59 TTM, and the free cash flow to net income ratio is 0.91 TTM, both suggesting efficient cash conversion. Overall, cash flow metrics show healthy liquidity and cash management practices.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.90B	2.87B	2.68B	2.52B	2.52B	2.30B
	Gross Profit
1.42B	1.39B	1.28B	1.21B	1.18B	1.03B
	EBIT
480.00M	462.00M	368.00M	412.00M	287.00M	363.00M
	EBITDA
641.00M	462.00M	535.00M	535.00M	417.00M	481.00M
	Net Income Common Stockholders
337.00M	326.00M	260.00M	293.00M	224.00M	231.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
267.00M	298.00M	315.00M	373.00M	1.38B	971.00M
	Total Assets
2.88B	2.80B	2.74B	2.72B	3.66B	3.55B
	Total Debt
843.00M	935.00M	1.06B	660.00M	154.00M	119.00M
	Net Debt
576.00M	637.00M	748.00M	338.00M	-1.17B	-852.00M
	Total Liabilities
1.89B	1.87B	2.06B	1.64B	1.33B	1.28B
	Stockholders Equity
970.00M	904.00M	654.00M	1.05B	2.31B	2.25B
Cash Flow		Free Cash Flow
306.00M	287.00M	252.00M	208.00M	314.00M	368.00M
	Operating Cash Flow
537.00M	524.00M	467.00M	372.00M	421.00M	487.00M
	Investing Cash Flow
-227.00M	-234.00M	-175.00M	-238.00M	178.00M	-344.00M
	Financing Cash Flow
-370.00M	-284.00M	-294.00M	-1.12B	-228.00M	-20.00M

UL Solutions Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 70.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 70.61 is below the 20-day moving average (MA) of 71.03, above the 50-day MA of 65.78, and above the 200-day MA of 55.39, indicating a neutral trend. The MACD of 1.09 indicates Positive momentum. The RSI at 55.86 is Neutral, neither overbought nor oversold. The STOCH value of 34.53 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
UNF	77 Outperform	$3.28B	22.82	7.17%	0.76%	5.04%	31.69%
ULS	74 Outperform	$14.16B	42.04	41.07%	0.74%	6.84%	29.09%
CBZ	74 Outperform	$3.66B	45.74	6.25%	―	32.27%	-40.50%
ARMK	71 Outperform	$10.51B	30.85	11.77%	1.05%	-3.47%	-45.03%
RTO	69 Neutral	$11.84B	29.94	7.44%	3.28%	3.96%	-17.48%
ABM	61 Neutral	$2.71B	34.79	4.30%	2.44%	3.52%	-67.27%
Sector *	58 Neutral	$4.92B	18.67	-16.94%	10.08%	13.73%	-24.47%

UL Solutions Inc. Class A Corporate Events

UL Solutions Inc. Holds Annual Stockholder Meeting

On May 20, 2025, UL Solutions Inc. held its annual meeting of stockholders where several proposals were voted on. The election of directors saw all nominees elected, with varying numbers of votes for and against. Additionally, the retention of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified. The advisory vote on executive compensation was approved, and the preferred frequency of stockholder advisory votes on executive compensation was discussed.

The most recent analyst rating on (ULS) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on UL Solutions Inc. Class A stock, see the ULS Stock Forecast page.