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

• Market Cap: $14.20B
• Dividend Yield: 0.73%
• Average Volume (3M): 699.37K
• Price to Earnings (P/E): 41.7
• Beta (1Y): 0.57
• 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: 595,606
• 30 Day Avg. Volume: 699,371
• PEG Ratio: 11.56
• Price to Book (P/B): 14.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 46.68
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 10.46
• Enterprise Value/Ebitda: 6.01
• 1Y Price Target: $71.13
• Price Target Upside: 1.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 74 Outperform
• Price Target: $81.00 ▲(15.60%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

UL Solutions posted another clean quarter, with strong growth momentum across each of the company’s segments and EBITDA margin that continues to trend higher than expectations.

Management Performance

Management's execution continues to exceed consensus expectations, driving adjusted 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 Market Risks

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

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 comprehensive suite of testing, inspection, and certification services. The company charges fees for assessing products and systems to ensure they meet specific safety and performance standards. Revenue streams include certification services for electrical and electronic products, advisory and training services for regulatory compliance, and software sales that help clients manage product safety and compliance data. Significant partnerships with industry leaders and government agencies often bolster its service offerings, enhancing its reputation as a trusted authority in safety science. The company also benefits from recurring revenue from clients who require ongoing compliance and certification services.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.87B	2.68B	2.52B	2.52B	2.30B
Gross Profit	1.39B	1.28B	1.21B	1.18B	1.03B
EBITDA	462.00M	535.00M	535.00M	417.00M	481.00M
Net Income	326.00M	260.00M	293.00M	224.00M	231.00M
Balance Sheet
Total Assets	2.80B	2.74B	2.72B	3.66B	3.55B
Cash, Cash Equivalents and Short-Term Investments	298.00M	315.00M	373.00M	1.38B	971.00M
Total Debt	935.00M	1.06B	660.00M	154.00M	119.00M
Total Liabilities	1.87B	2.06B	1.64B	1.33B	1.28B
Stockholders Equity	904.00M	654.00M	1.05B	2.31B	2.25B
Cash Flow
Free Cash Flow	287.00M	252.00M	208.00M	314.00M	368.00M
Operating Cash Flow	524.00M	467.00M	372.00M	421.00M	487.00M
Investing Cash Flow	-234.00M	-175.00M	-238.00M	178.00M	-344.00M
Financing Cash Flow	-284.00M	-294.00M	-1.12B	-228.00M	-20.00M

UL Solutions Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 70.07
• 50DMA: Negative
• 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 Neutral. The current price of 70.07 is below the 20-day moving average (MA) of 71.39, below the 50-day MA of 70.88, and above the 200-day MA of 57.29, indicating a neutral trend. The MACD of 0.38 indicates Positive momentum. The RSI at 49.65 is Neutral, neither overbought nor oversold. The STOCH value of 52.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
CBZ	76 Outperform	$4.02B	51.15	6.25%	―	32.27%	-40.50%
ABM	75 Outperform	$3.00B	38.76	4.30%	2.20%	3.52%	-67.27%
ULS	74 Outperform	$14.20B	41.72	41.07%	0.73%	6.84%	29.09%
ARMK	71 Outperform	$11.31B	33.30	11.77%	0.97%	-3.47%	-45.03%
UNF	61 Neutral	$3.17B	21.84	7.15%	0.79%	4.18%	18.93%
RTO	61 Neutral	$11.51B	30.01	7.44%	3.31%	3.96%	-17.48%
Sector *	57 Neutral	$5.81B	21.43	-28.61%	5.74%	10.78%	-34.04%

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.