Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 6.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.4 |
| PEG | 4.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 33.2x
- ▸PEG: 1.95
ULS · Why this verdict
Why UL Solutions (ULS) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
UL Solutions has beaten earnings estimates in all four consecutive quarters with an average surprise of 17% and converts 120% of net income to free cash flow — a rare cash quality signal — but trades above analyst target resistance with negative asymmetry and geographic concentration risk in its current setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
UL Solutions has exceeded earnings estimates in every one of the last four quarters with an average positive surprise of 17%, and converts 120% of net income to free cash flow — one of only a few names in the dataset with free cash flow above reported earnings, indicating very high earnings quality. Quality breakdown | The company continues to beat earnings estimates in at least 3 of the next 4 quarters and free cash flow conversion stays above 100% of net income | →Stable |
| CounterAnalyst targets have already been reached and the stock has negative asymmetry, which means even sustained earnings beats may not translate to price appreciation at current levels | ||
At $96.99, the stock is already within 5% of the analyst-implied resistance target of $101.76, leaving very little upside and producing a negative asymmetry ratio of -0.41, meaning there is no favorable risk-reward entry at current prices. Targets | Price pulls back below $90, restoring at least 10% upside to the resistance target and improving the asymmetry ratio above 1.0 | →Stable |
| CounterThe technical score of 7.5 and support/resistance score of 8.8 suggest strong technical underpinning near current levels, and analyst estimates could be revised upward given the perfect beat streak | ||
UL Solutions derives 59% of revenue from outside the United States, a high-severity concentration risk that exposes the business to currency headwinds, geopolitical disruption, and regional regulatory changes that could impair earnings in specific markets. Bear case | No major currency or geopolitical disruption reduces international revenue by more than 10% year-over-year over the next 12 months | →Stable |
| CounterGlobal testing, inspection, and certification businesses naturally generate revenue internationally, and diversification across many countries reduces single-country risk while expanding the addressable market | ||
With a quality score of 7.4, momentum of 6.6, and Piotroski score of 8 out of 9, UL Solutions exhibits strong fundamental and technical health, ranking as a superior-ROE company relative to specialty business services peers. Peer-rank breakdown | Quality score stays above 7.0 and momentum score stays above 5.5 for the next 12 months, indicating sustained fundamental and price trend strength | →Stable |
| CounterExpensive valuation with a forward P/E of 37.6x and PEG of 2.21 means the stock requires sustained earnings delivery to justify the multiple; any execution miss could cause significant re-rating | ||
UL Solutions has exceeded earnings estimates in every one of the last four quarters with an average positive surprise of 17%, and converts 120% of net income to free cash flow — one of only a few names in the dataset with free cash flow above reported earnings, indicating very high earnings quality.
→StableQuality breakdown
- Expectation
- The company continues to beat earnings estimates in at least 3 of the next 4 quarters and free cash flow conversion stays above 100% of net income
CounterAnalyst targets have already been reached and the stock has negative asymmetry, which means even sustained earnings beats may not translate to price appreciation at current levels
At $96.99, the stock is already within 5% of the analyst-implied resistance target of $101.76, leaving very little upside and producing a negative asymmetry ratio of -0.41, meaning there is no favorable risk-reward entry at current prices.
→StableTargets
- Expectation
- Price pulls back below $90, restoring at least 10% upside to the resistance target and improving the asymmetry ratio above 1.0
CounterThe technical score of 7.5 and support/resistance score of 8.8 suggest strong technical underpinning near current levels, and analyst estimates could be revised upward given the perfect beat streak
UL Solutions derives 59% of revenue from outside the United States, a high-severity concentration risk that exposes the business to currency headwinds, geopolitical disruption, and regional regulatory changes that could impair earnings in specific markets.
→StableBear case
- Expectation
- No major currency or geopolitical disruption reduces international revenue by more than 10% year-over-year over the next 12 months
CounterGlobal testing, inspection, and certification businesses naturally generate revenue internationally, and diversification across many countries reduces single-country risk while expanding the addressable market
With a quality score of 7.4, momentum of 6.6, and Piotroski score of 8 out of 9, UL Solutions exhibits strong fundamental and technical health, ranking as a superior-ROE company relative to specialty business services peers.
→StablePeer-rank breakdown
- Expectation
- Quality score stays above 7.0 and momentum score stays above 5.5 for the next 12 months, indicating sustained fundamental and price trend strength
CounterExpensive valuation with a forward P/E of 37.6x and PEG of 2.21 means the stock requires sustained earnings delivery to justify the multiple; any execution miss could cause significant re-rating
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.3 |
| Gross margin | 6.0 |
| Op margin | 7.2 |
| Net margin | 5.6 |
| Current ratio | 4.5 |
| FCF quality | 9.0 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 32%
- ▸Excellent cash conversion: 120% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 9.3 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.8 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Oversold in uptrend (RSI 18)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 8.4 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 28%
Insider
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 4.7 |
| notable moves | 3.0 |
- ▸Modest insider selling — $7,944,503 (0.046% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.3 |
| quality rank | 7.7 |
| growth rank | 5.5 |
- ▸Superior ROE vs peers
Technical
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 9.7 |
| 52w position | 5.9 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.4 |
| days to cover | 6.5 |
| volatility | 3.3 |
| put call | 0.0 |
| implied vol | 3.7 |
| max pain risk | 3.0 |
| beta | 9.2 |
| debt equity | 8.4 |
- ▸Elevated put/call: 3.00
- ▸Above max pain $60
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 7.5 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 13 days
- ▸Dividend aristocrat: 0.7% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
- CONTRARIAN_OVERRIDE:RSI=18,above_200MA,quality=7.4,upside=28%
Failed (1)
- MOMENTUM:2.8<4.5
Warning (3)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:13d<=14d (soft)
- MOMENTUM_OVERRIDDEN:RSI 18 extreme oversold + fundamentals intact
Reward-to-Risk
1.50
Upside
+11.0%
Downside
7.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 13d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:1.5>=1.5. Top dim: Technical at 7.7; weakest: Momentum at 2.8. No conviction either direction.
The strongest dimensions are Technical at 7.7, Catalyst at 7.5, and Quality at 7.4; the weakest are Momentum at 2.8, Insider at 3.5, and Value at 4.0. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of 1.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak With Fcf Quality
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the perfect beat streak
- P2Price Above Analyst Resistance
Trip ifPrice rises above $105, more than 8% above current $96.99, further exceeding resistance without analyst target revision
- P3Geographic Concentration Outside Us
Trip ifInternational revenue falls by more than 10% year-over-year in any single quarter
- P4Strong Quality And Momentum Combination
Trip ifQuality score falls below 6.0 or Piotroski F-Score drops below 6 out of 9