Element Solutions (ESI) Up 3.5% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Element Solutions has shown a positive trend in its stock performance, with shares increasing by approximately 3.5% since the last earnings report, outperforming the S&P 500 [1] Financial Performance - In Q3 2024, Element Solutions reported earnings of 17 cents per share, a significant improvement from a loss of 13 cents in the same quarter last year. Adjusted earnings per share were 39 cents, surpassing the Zacks Consensus Estimate of 38 cents [2] - The company generated net sales of $645 million, reflecting a year-over-year increase of 7.6%, and exceeding the Zacks Consensus Estimate of $618.8 million. The adjusted EBITDA margin decreased by 30 basis points to 22.1% [3] Segment Highlights - The Electronics segment saw net sales rise by 14% year over year to $419.1 million, with organic net sales increasing by 9%. This figure exceeded the consensus estimate of $396.9 million [4] - In contrast, the Industrial & Specialty segment experienced a 3% decline in net sales to $225.9 million, with organic net sales remaining flat, but still surpassing the consensus of $221.8 million [4] Financial Position - At the end of the quarter, Element Solutions had cash and cash equivalents of $376 million, a 14% increase year over year. Long-term debt decreased by 5.5% to $1,914.7 million [5] - Cash from operating activities was reported at $98.5 million for the quarter [6] Outlook - The company projects adjusted EBITDA for the full year 2024 to be between $535 million and $540 million, with anticipated free cash flow of $280 million to $300 million [7] Estimate Revisions - There has been a downward trend in estimates revisions over the past two months [8] VGM Scores - Element Solutions currently holds a subpar Growth Score of D, a Momentum Score of C, and a Value Score of D, placing it in the bottom 40% for the value investment strategy. The overall aggregate VGM Score is D [9] Industry Comparison - Element Solutions is part of the Zacks Chemical - Specialty industry. Another player in this sector, Sherwin-Williams, has seen a 9.6% increase in stock price over the past month, with reported revenues of $6.16 billion, reflecting a year-over-year change of +0.8% [11]