UL Solutions Inc. (ULS)

Price$71.10Cached quoteAs of 2026-09-11 04:58 UTC

AI: Overvalued

Price checkEven after the selloff, the shares still require unusually strong cash growth to look cheap.

At the observed quote, the company’s equity value is about $14.9 billion. Trailing free cash flow—cash left after running and investing in the business—is about $436 million, so the shares cost roughly 34 times that cash flow and offer only a 2.9% cash yield. Enterprise value, which adds debt and subtracts cash, is about 26 times trailing operating income. Headline earnings are boosted by a $191 million pre-tax divestiture gain. A simple 9% return hurdle with 3% long-run growth needs about 12% annual free-cash-flow growth for ten years. Investing.com+1

Big pictureCash generation has improved for years, and the balance sheet now provides meaningful downside protection.

Revenue rose from $2.52 billion in 2022 to $3.05 billion in 2025, while operating cash flow climbed from $372 million to $600 million. Free cash flow rose from about $208 million to $403 million over the same span, then reached $241 million in the first half of 2026 versus $208 million a year earlier. Debt fell from $904 million at the end of 2023 to $301 million by June 2026, while cash reached $434 million. That leaves about $133 million more cash than debt before the planned acquisition.

Business strengthCertification demand, broad customers, and improving margins make the core business unusually resilient.

UL Solutions serves more than 80,000 customers in over 110 countries, spreading demand across many industries and geographies. In the second quarter, $270 million of $816 million revenue came from ongoing certification services that repeatedly check already-certified products, adding a recurring element to demand. Organic revenue grew 6.6%, and operating income rose to $150 million from $139 million a year earlier. Still, this is not fully defensive: management says customers can delay or cancel testing and product-development work when geopolitical or economic uncertainty rises. SEC+2SEC+2

What could change the storyFaster cash growth could justify the premium; weaker returns on new spending would not.

The bull case is that laboratory investment and the planned Eurofins electrical-and-electronics acquisition deepen the testing network and sustain double-digit cash growth. The bear case is that spending stays high while growth remains mid-single-digit. Management raised 2026 capital spending guidance to about 8.5% of revenue; the acquisition costs about €575 million for a business expected to produce about $200 million of 2026 revenue. Shares outstanding rose about 0.9% from year-end 2024 to June 2026. Stock compensation was $47 million in 2025 and $35 million in first-half 2026; first-half dividends were $58 million, with no buybacks shown in the supplied history. SEC+2ir.ul.com+2

AI: News

Q2 spending resetStrong second-quarter results were overshadowed by higher planned investment, and the shares sold off sharply.

On August 4, UL Solutions reported $816 million of quarterly revenue, up 5.2%, with 6.6% organic growth and adjusted earnings of $0.59 per share versus a $0.51 consensus estimate. Its adjusted profit measure before financing, taxes and noncash depreciation reached a 26.8% margin. However, full-year capital spending guidance moved to about 8.5% of revenue from the prior 7% to 8% range. The shares closed about 14% lower that day. The timing points to spending and margin concerns, but does not prove one factor alone caused the move. ir.ul.com+2Investing.com+2

Eurofins testing acquisitionThe Eurofins testing deal adds growth potential, but investors must now judge integration and return risk.

On April 13, UL Solutions agreed to buy Eurofins Scientific’s electrical-and-electronics testing business for about €575 million, roughly $670 million at announcement. The target was expected to generate about $200 million of 2026 revenue, and the company said the price equals about 14.5 times estimated 2026 earnings before interest, taxes, depreciation and amortization after expected cost savings. The deal is expected to close in the fourth quarter and use cash plus the revolving credit facility. It could strengthen geographic reach, but weak integration returns would pressure value. ir.ul.com

Portfolio asset salesAsset sales improved funding flexibility while making reported earnings temporarily stronger than the core business.

UL Solutions completed the sale of its Employee Health and Safety software business on April 1 for about $202 million and recorded a $191 million pre-tax gain. Later in April, it agreed to sell its roughly 28% DQS stake for about €105 million, with an expected pre-tax gain near $100 million when that sale closes. These moves help finance the Eurofins acquisition and explain much of the recent balance-sheet improvement. They also mean reported net income currently overstates the repeatable earnings power of the ongoing operations. SEC

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Revenue

2022

2023

2024

2025

Net income

2022

2023

2024

2025

Free cash flow

2022

2023

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2025

Total cash / debt

CashTotal debt

2022

2023

2024

2025

Financial statements

	2025	2024	2023	2022
Revenue	$3.05B	$2.87B	$2.68B	$2.52B
Gross profit	$1.51B	$1.39B	$1.28B	$1.21B
Gross margin	49.46%	48.50%	47.95%	47.90%
Operating expenses	$988.0M	$930.0M	$916.0M	$795.0M
Operating income	$522.0M	$462.0M	$368.0M	$412.0M
Operating margin	17.10%	16.10%	13.74%	16.35%
EBITDA	$710.0M	$634.0M	$522.0M	$547.0M
EBITDA margin	23.26%	22.09%	19.49%	21.71%
Net income	$325.0M	$326.0M	$260.0M	$293.0M
Net profit margin	10.65%	11.36%	9.71%	11.63%
Basic EPSper basic share	$1.62	$1.63	$1.30	$1.47
Diluted EPSper diluted share	$1.60	$1.62	$1.30	$1.47

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

9.13%of listed shares

BlackRock, Inc.7.13M shares · Jun 30, 2026

View holders

Top 20 reported holders of ULS
Holder	% owned
BlackRock, Inc.	9.13%7.13M shares
T. Rowe Price Investment Management, Inc.	8.86%6.92M shares
Capital International Investors	7.83%6.12M shares
KAYNE ANDERSON RUDNICK INVESTMENT MANAGEMENT LLC	6.01%4.69M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.49%3.5M shares
Capital Research Global Investors	4.31%3.37M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.15%3.24M shares
Jupiter Topco LLC	3.89%3.04M shares
Durable Capital Partners LP	3.76%2.94M shares
STATE STREET CORP	2.92%2.28M shares
GEODE CAPITAL MANAGEMENT, LLC	2.57%2.01M shares
BESSEMER GROUP INC	2.39%1.87M shares
NEUBERGER BERMAN GROUP LLC	2.33%1.82M shares
Allspring Global Investments Holdings, LLC	2.01%1.57M shares
NORGES BANK	1.90%1.49M shares
FMR LLC	1.78%1.39M shares
PRICE T ROWE ASSOCIATES INC /MD/	1.71%1.34M shares
FIRST TRUST ADVISORS LP	1.67%1.3M shares
WELLS FARGO & COMPANY/MN	1.46%1.14M shares
FEDERATED HERMES, INC.	1.40%1.09M shares

Percentages use 78.14M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys5$10.0K disclosed value

Sells (SEC code S)25$2.26B disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 9, 2026Form 4 · 10b5-1	PEPPING KAREN KSenior VP & CAO	SellClass A Common Stock	725	$97.74	$70.9K	8.1K
Jun 3, 2026Form 4 · 10b5-1	Schjotz GitteSee Remarks	SellClass A Common Stock	9.9K	$96.98	$956.7K	59.3K
Jun 2, 2026Form 4 · 10b5-1	Schjotz GitteSee Remarks	SellClass A Common Stock	12.0K	$99.71	$1.20M	69.2K
Jun 1, 2026Form 4 · 10b5-1	Scanlon Jennifer F.President and CEO	SellClass A Common Stock	5.0K	$100.59	$502.4K	176.7K
Jun 1, 2026Form 4 · 10b5-1	Scanlon Jennifer F.President and CEO	SellClass A Common Stock	7.5K	$99.60	$747.5K	181.7K

Review ownership filings at SEC.gov ↗

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UL Solutions Inc. (ULS)

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