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UL Solutions Inc. Class A (ULS)
NYSE:ULS
US Market
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UL Solutions Inc. Class A (ULS) AI Stock Analysis

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ULS

UL Solutions Inc. Class A

(NYSE:ULS)

Rating:72Outperform
Price Target:
$72.00
▲(9.14% Upside)
UL Solutions Inc. scores well due to its strong financial performance and positive earnings call, which highlight robust revenue growth and strategic expansions. However, technical analysis indicates bearish momentum, and the high P/E ratio suggests 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.
Management Performance
Management's execution continues to exceed consensus expectations, driving adjusted diluted EPS up approximately 20% from 2024 to 2026.
Market Position
UL Solutions is positioned as a well-established leader in the attractive product TIC market with a resilient business model.
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.
Competitive Market Risks
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, a premium of just under 100% compared to the average of its peers.

UL Solutions Inc. Class A (ULS) vs. SPDR S&P 500 ETF (SPY)

UL Solutions Inc. Class A Business Overview & Revenue Model

Company DescriptionUL 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 MoneyUL 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 Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: -9.68%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue growth, margin improvement, and significant cash flow generation. Despite some challenges in the Software & Advisory segment and uncertainties related to tariffs and geopolitical issues, the overall sentiment is positive due to strategic expansions and strong performance across most segments.
Q2-2025 Updates
Positive Updates
Record Quarterly Consolidated Revenues
UL Solutions delivered record quarterly consolidated revenues, up 6.3% compared to the second quarter last year and up 5.5% on an organic basis.
Significant Margin Improvement
Adjusted EBITDA grew 13.9% with adjusted EBITDA margin expanding by 170 basis points to the highest level since becoming a public company.
Strong Free Cash Flow
Generated $208 million of free cash flow through the first half of 2025, representing a 58.8% increase compared to the year-ago period.
Capacity Expansions
Launched European advanced battery testing laboratory in Aachen, Germany, and expanded HVAC testing facility in Carugate, Italy, among other expansions.
Data Center Segment Potential
Introduced a new testing and certification service for immersion cooling fluids used in data centers, addressing safety and efficiency needs.
Negative Updates
Challenges in Software & Advisory Segment
Adjusted EBITDA for Software & Advisory was unchanged compared to the previous year, with a margin decline of 70 basis points due to unfavorable mix and higher employee compensation expenses.
Advisory Weakness in the United States
Experienced weakness in the advisory sector in the U.S., impacting renewable advisory and healthy buildings offerings.
Impact of Tariffs and Geopolitical Uncertainty
Customer projects initially slowed due to tariff levels and geopolitical issues, although a recovery was noted in June.
Company Guidance
During UL Solutions' second quarter 2025 earnings call, they reported strong performance with record consolidated revenues of $776 million, marking a 6.3% increase over the previous year, and a 5.5% rise on an organic basis. The company highlighted significant contributions from their Industrial segment, which grew 7% organically, followed by Consumer at 4.7%, and Software & Advisory at 3.2%. Adjusted EBITDA rose by 13.9%, reaching $197 million, and the adjusted EBITDA margin expanded by 170 basis points to 25.4%. UL Solutions also generated $208 million in free cash flow in the first half of 2025. The company affirmed their full-year guidance, expecting mid-single-digit organic revenue growth and maintaining an adjusted EBITDA margin target of approximately 24%. Key investments included expansions of testing facilities in Europe and the introduction of new services aimed at addressing the growing needs of the data center market.

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
85
Very Positive
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
78
Positive
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
80
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.90B2.87B2.68B2.52B2.52B2.30B
Gross Profit1.42B1.39B1.28B1.21B1.18B1.03B
EBITDA641.00M462.00M535.00M535.00M417.00M481.00M
Net Income337.00M326.00M260.00M293.00M224.00M231.00M
Balance Sheet
Total Assets2.88B2.80B2.74B2.72B3.66B3.55B
Cash, Cash Equivalents and Short-Term Investments267.00M298.00M315.00M373.00M1.38B971.00M
Total Debt843.00M935.00M1.06B660.00M154.00M119.00M
Total Liabilities1.89B1.87B2.06B1.64B1.33B1.28B
Stockholders Equity970.00M904.00M654.00M1.05B2.31B2.25B
Cash Flow
Free Cash Flow306.00M287.00M252.00M208.00M314.00M368.00M
Operating Cash Flow537.00M524.00M467.00M372.00M421.00M487.00M
Investing Cash Flow-227.00M-234.00M-175.00M-238.00M178.00M-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
Negative
Last Price65.97
Price Trends
50DMA
70.87
Negative
100DMA
65.56
Positive
200DMA
58.84
Positive
Market Momentum
MACD
-0.81
Positive
RSI
37.30
Neutral
STOCH
27.81
Neutral
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 65.97 is below the 20-day moving average (MA) of 70.38, below the 50-day MA of 70.87, and above the 200-day MA of 58.84, indicating a neutral trend. The MACD of -0.81 indicates Positive momentum. The RSI at 37.30 is Neutral, neither overbought nor oversold. The STOCH value of 27.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$12.20B36.485.86%2.34%1.56%-32.50%
75
Outperform
$2.92B37.604.30%2.16%3.52%-67.27%
72
Outperform
$12.96B39.8235.12%0.77%6.92%21.82%
72
Outperform
$3.38B35.737.84%46.49%-25.62%
63
Neutral
$10.35B29.1212.00%1.07%-0.06%3.83%
61
Neutral
$3.07B21.117.15%0.80%4.18%18.93%
56
Neutral
$6.41B9.61-29.56%6.32%10.97%-32.97%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ULS
UL Solutions Inc. Class A
65.97
16.56
33.52%
ABM
ABM Industries
47.23
-4.12
-8.02%
CBZ
CBIZ
61.85
-6.62
-9.67%
UNF
UniFirst
172.61
-10.52
-5.74%
ARMK
ARAMARK Holdings
39.12
4.94
14.45%
RTO
Rentokil Initial
25.07
-4.38
-14.87%

UL Solutions Inc. Class A Corporate Events

Shareholder Meetings
UL Solutions Inc. Holds Annual Stockholder Meeting
Neutral
May 22, 2025

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.

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.Date of analysis: Aug 06, 2025