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UL Solutions Inc. Class A (ULS)
:ULS
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UL Solutions Inc. Class A
(NYSE:ULS)
Select Model
Select Model
Rating:76Outperform
Price Target:
$86.00
▲(10.44% Upside)
UL Solutions Inc. has a strong financial foundation and positive earnings call sentiment, driving its overall score. The technical indicators support a bullish trend, though high valuation metrics suggest caution. The company's strategic investments and growth in key segments bolster its future prospects.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand for UL's services, reinforcing its position as a leader in safety science and compliance solutions.
Cash Flow Generation
Strong free cash flow growth enhances UL's ability to invest in strategic initiatives and maintain financial flexibility, supporting long-term stability.
Industrial Segment Growth
Robust growth in the industrial segment underscores UL's competitive edge in certification services, capitalizing on trends like automation and energy efficiency.
Negative Factors
Consumer Segment Challenges
Slowing growth in the consumer segment may indicate market saturation or competitive pressures, potentially impacting future revenue streams.
Advisory Services Weakness
Challenges in advisory services could hinder UL's ability to capitalize on emerging trends, affecting its growth in consulting revenues.
Cost Pressures
Rising costs could pressure margins, reducing profitability and limiting the company's ability to invest in growth opportunities.
UL Solutions Inc. Class A (ULS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.64B
Dividend Yield0.66%
Average Volume (3M)572.49K
Price to Earnings (P/E)48.0
Beta (1Y)0.53
Revenue Growth6.92%
EPS Growth21.82%
CountryUS
Employees14,813
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.52
Shares Outstanding62,752,790
10 Day Avg. Volume596,269
30 Day Avg. Volume572,487
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue5.20
Enterprise Value/Gross Profit10.76
Enterprise Value/Ebitda23.35
Forecast
1Y Price Target
$71.23Price Target Upside-8.53% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering4
UL Solutions Inc. Class A Business Overview & Revenue Model
Company DescriptionUL Solutions Inc. Class A (ULS) is a global leader in safety science, providing expert services in testing, inspection, certification, and advisory solutions across various sectors including consumer products, industrial, electrical, and healthcare. The company is dedicated to advancing safety and sustainability through innovative technologies and services, ensuring products meet rigorous safety standards while promoting environmental responsibility.
How the Company Makes MoneyUL Solutions generates revenue primarily through its testing and certification services, which are essential for companies looking to ensure their products comply with safety regulations and standards. Key revenue streams include fees for product testing, certification services, and regulatory consulting. The company also earns income from training and educational programs aimed at helping businesses understand compliance requirements and improve their safety practices. Strategic partnerships with industry leaders and regulatory bodies enhance UL's credibility and market reach, contributing significantly to its earnings.
UL Solutions Inc. Class A Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance with record revenue and growth in industrial and data center services, supported by successful capacity expansions. However, challenges in consumer segment growth and advisory services were noted. The outlook remains positive despite some macroeconomic uncertainties.Q2-2025 Updates
Positive Updates
Record-Breaking Quarterly Revenue
UL Solutions reported record consolidated revenues of $776 million for Q2 2025, up 6.3% year-over-year and 5.5% on an organic basis.
Strong Performance in Industrial Segment
The Industrial segment led the growth with a 7% increase in organic revenue, driven by ongoing certification services and certification testing, particularly in energy and automation.
Adjusted EBITDA Growth
Adjusted EBITDA grew 13.9% year-over-year, with a margin increase of 170 basis points to 25.4%.
Successful Capacity Expansions
Notable expansions included the European advanced battery testing laboratory in Aachen, Germany, and the HVAC testing facility in Carugate, Italy.
Free Cash Flow Increase
The company generated $208 million in free cash flow in the first half of 2025, a 58.8% increase compared to the same period last year.
Investment in Data Center Services
Launched new testing and certification services for immersion cooling fluids used in data centers, addressing safety and efficiency needs.
Negative Updates
Consumer Segment Moderation
Consumer segment organic growth moderated to 4.7% in Q2 2025 from 7.7% in Q1, attributed to pull-forward activity related to tariff anticipation.
Challenges in Advisory Services
Weakness in advisory services, particularly in the U.S., due to changes in renewable policies and pressures in the commercial real estate sector.
Impact of Higher Depreciation and FX
Cost of revenue as a percentage of revenue increased by 70 basis points due to higher depreciation and negative foreign exchange impacts.
Company Guidance
During UL Solutions' second quarter 2025 earnings call, the company reaffirmed its full-year outlook, highlighting a record quarterly consolidated revenue of $776 million, reflecting a 6.3% increase from the previous year and 5.5% growth on an organic basis. The Industrial segment led with a 7% organic growth, while Consumer and Software & Advisory segments grew by 4.7% and 3.2%, respectively. Adjusted EBITDA rose by 13.9% to $197 million, with the margin expanding by 170 basis points to 25.4%, the highest since going public. Free cash flow for the first half of 2025 was $208 million, and the company maintained a robust balance sheet with $272 million in cash and cash equivalents. Capital expenditures were $93 million for the first half, and the company expects them to remain at 7-8% of revenue for the full year. The adjusted net income for the quarter was $110 million, and the adjusted diluted earnings per share increased to $0.52 from $0.44. The company emphasized its strategic investments in new testing facilities and its commitment to capitalizing on mega trends like electrification and digitalization.UL Solutions Inc. Class A Financial Statement Overview
Summary
UL Solutions Inc. demonstrates strong financial health with consistent revenue growth, efficient operations, and effective cash flow management. Improved leverage and robust return on equity enhance financial stability, though past leverage levels and cash flow volatility present some risks.Income Statement
UL Solutions Inc. has demonstrated strong revenue growth with a TTM increase of 1.58% and consistent gross profit margins around 48%. The net profit margin is stable at approximately 11%, indicating effective cost management. EBIT and EBITDA margins are healthy, reflecting operational efficiency. However, the slight decline in net profit margin from previous periods suggests potential cost pressures.85
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of 0.74 in the TTM, showing improved leverage management compared to previous years. Return on equity is robust at 34%, indicating effective use of shareholder funds. The equity ratio is stable, suggesting a balanced capital structure. However, past higher leverage levels pose a potential risk if not managed carefully.78
Positive
Cash Flow
Operating cash flow is strong, with a TTM operating cash flow to net income ratio of 0.76, indicating good cash generation relative to earnings. Free cash flow growth is positive at 18.95%, supporting future investments. The free cash flow to net income ratio of 0.63 highlights solid cash conversion. However, fluctuations in free cash flow growth in prior years suggest potential volatility.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.95B | 2.87B | 2.68B | 2.52B | 2.52B | 2.30B |
| Gross Profit | 1.43B | 1.38B | 1.26B | 1.21B | 1.18B | 1.03B |
| EBITDA | 657.00M | 642.00M | 535.00M | 535.00M | 417.00M | 481.00M |
| Net Income | 327.00M | 326.00M | 260.00M | 293.00M | 224.00M | 231.00M |
Balance Sheet | ||||||
| Total Assets | 2.92B | 2.80B | 2.74B | 2.72B | 3.66B | 3.55B |
| Cash, Cash Equivalents and Short-Term Investments | 272.00M | 298.00M | 315.00M | 373.00M | 1.38B | 971.00M |
| Total Debt | 805.00M | 935.00M | 1.06B | 660.00M | 154.00M | 161.00M |
| Total Liabilities | 1.81B | 1.87B | 2.06B | 1.64B | 1.33B | 1.28B |
| Stockholders Equity | 1.09B | 904.00M | 654.00M | 1.05B | 2.31B | 2.25B |
Cash Flow | ||||||
| Free Cash Flow | 364.00M | 287.00M | 252.00M | 208.00M | 314.00M | 368.00M |
| Operating Cash Flow | 581.00M | 524.00M | 467.00M | 372.00M | 421.00M | 487.00M |
| Investing Cash Flow | -248.00M | -234.00M | -175.00M | -238.00M | 178.00M | -344.00M |
| Financing Cash Flow | -346.00M | -284.00M | -294.00M | -1.12B | -228.00M | -20.00M |
UL Solutions Inc. Class A Technical Analysis
Positive
77.87
Price Trends
70.70
Positive
70.30
Positive
64.37
Positive
Market Momentum
2.47
Positive
58.72
Neutral
58.08
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 77.87 is above the 20-day moving average (MA) of 76.73, above the 50-day MA of 70.70, and above the 200-day MA of 64.37, indicating a bullish trend. The MACD of 2.47 indicates Positive momentum. The RSI at 58.72 is Neutral, neither overbought nor oversold. The STOCH value of 58.08 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 Risk Analysis
UL Solutions Inc. Class A disclosed 104 risk factors in its most recent earnings report. UL Solutions Inc. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
UL Solutions Inc. Class A Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $15.64B | 47.98 | 35.12% | 0.66% | 6.92% | 21.82% | |
| ― | $13.94B | 42.09 | 5.86% | 2.36% | 1.56% | -32.50% | |
| ― | $18.87B | 13.60 | 6.21% | 1.29% | -4.17% | 4.76% | |
| ― | $4.68B | 15.32 | 17.61% | 1.44% | 3.40% | 13.75% | |
| ― | $2.99B | 36.24 | 7.44% | ― | 59.19% | -35.47% | |
| ― | $9.96B | 28.02 | 12.00% | 1.11% | -0.06% | 3.83% | |
| ― | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ULS
UL Solutions Inc. Class A
77.87
26.36
51.17%
CBZ
CBIZ
55.00
-16.13
-22.68%
GPN
Global Payments
77.76
-26.24
-25.23%
MMS
Maximus
83.12
-2.81
-3.27%
ARMK
ARAMARK Holdings
37.88
0.15
0.40%
RTO
Rentokil Initial
27.82
2.86
11.46%
UL Solutions Inc. Class A Corporate Events
Business Operations and StrategyExecutive/Board Changes
UL Solutions Inc. Announces Leadership Changes
Neutral
Aug 14, 2025
On August 14, 2025, UL Solutions Inc. announced significant executive leadership changes effective September 1, 2025. Weifang Zhou will transition to a non-executive role as Special Advisor to the CEO, while Alex Dadakis will succeed him as Executive Vice President and President of Testing, Inspection, and Certification. Gitte Schjøtz will take over Dadakis’s previous role as Chief Business Operations and Innovation Officer. These changes aim to enhance the company’s agility and responsiveness to market demands, reinforcing its position in the Testing, Inspection, and Certification industry.
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.
UL Solutions Inc. Reports Strong Q2 2025 Results
Aug 6, 2025
UL Solutions Inc., a global leader in safety science, specializes in independent third-party testing, inspection, certification services, and related software and advisory offerings, supporting customers in over 110 countries.
UL Solutions Inc. Reports Strong Earnings Growth
Aug 6, 2025
The earnings call for UL Solutions Inc. Class A depicted a positive outlook, underscored by robust revenue growth, margin improvements, and substantial cash flow generation. While challenges were noted in the Software & Advisory segment and uncertainties lingered around tariffs and geopolitical issues, the overall sentiment remained optimistic, driven by strategic expansions and strong performance across most segments.
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.