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

• Market Cap: $12.70B
• Dividend Yield: 0.81%
• Average Volume (3M): 931.26K
• Price to Earnings (P/E): 38.6
• Beta (1Y): 0.49
• Revenue Growth: 6.92%
• EPS Growth: 21.82%
• Country: US
• Employees: 14,813
• Sector: General
• Sector Strength: N/A
• Industry: Specialty Business Services
• EPS (TTM): 0.52
• Shares Outstanding: 62,752,790
• 10 Day Avg. Volume: 887,624
• 30 Day Avg. Volume: 931,261
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 5.20
• Enterprise Value/Gross Profit: 10.76
• Enterprise Value/Ebitda: 23.35
• 1Y Price Target: $70.68
• Price Target Upside: 11.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 70 Outperform
• Price Target: $74.00 ▲(17.09% Upside)

UL Solutions Inc. has a strong financial foundation and positive earnings call highlights, supporting its growth trajectory. However, technical indicators suggest bearish momentum, and the high P/E ratio indicates potential overvaluation, which tempers the overall score.

Positive Factors

Financial Performance

UL Solutions' second-quarter revenue was above estimates, indicating strong performance in the consumer, software, advisory, and industrial sectors.

Growth Potential

UL Solutions is positioned as a well-established leader in the attractive product TIC market with a resilient business model.

Margin and Earnings

There is a potential for margin outperformance in the Consumer division and operational leverage within the Software component, which can lead to above-consensus margins.

Negative Factors

Client Uncertainty

Customer order volumes through April and May came in weaker than management expected, attributed to broad-based client uncertainty following 'Liberation Day' announcements.

Market Competition

Risks include operating in a highly competitive market and exposure to geopolitical uncertainty, including potential tariff impacts.

Valuation Concerns

The stock now trades on a 12-month forward consensus P/E ratio of 38.6x, which is a premium of just under 100% compared to the average of its peers.

UL Solutions Inc. Class A Business Overview & Revenue Model

Company Description

UL Solutions Inc. Class A (ULS) is a global safety science company specializing in testing, inspection, certification, auditing, and training services. Operating across multiple sectors, including consumer goods, industrial, and healthcare, UL Solutions aims to promote safe living and working environments. The company's core services include safety certification, advisory services, and software solutions designed to improve product safety, compliance, and performance.

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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 63.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ULS, the sentiment is Negative. The current price of 63.2 is below the 20-day moving average (MA) of 66.93, below the 50-day MA of 69.48, and above the 200-day MA of 59.81, indicating a neutral trend. The MACD of -1.69 indicates Positive momentum. The RSI at 35.80 is Neutral, neither overbought nor oversold. The STOCH value of 7.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
RTO	76 Outperform	$12.10B	36.16	5.86%	2.74%	1.56%	-32.50%
ABM	75 Outperform	$3.04B	39.16	4.30%	2.06%	3.52%	-67.27%
UNF	74 Outperform	$3.13B	21.58	7.15%	0.78%	4.18%	18.93%
ULS	70 Outperform	$12.70B	38.59	35.12%	0.81%	6.92%	21.82%
ARMK	67 Neutral	$10.36B	29.20	12.00%	1.06%	-0.06%	3.83%
CBZ	65 Neutral	$3.51B	37.93	7.84%	―	46.49%	-25.62%
Sector *	56 Neutral	$6.56B	-1.65	0.45%	6.25%	14.92%	10.98%

UL Solutions Inc. Class A Corporate Events

UL Solutions Inc. Announces Leadership Changes

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.