Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 27 Jul 2026
ULS· Industrials
UL Solutions
UL Solutions' high valuation and weak net margin raise significant concerns despite strong ROIC and gross margins.
Buffett fit
Partial fit
Owner
52
Durability
78
Management
62
Price
0
Score updated 5 Oct 2026 · analysis from 27 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of UL Solutions, I would focus on enhancing margins and revenue growth.
The full reasoning comes with a free account.
Over the next decade, I want to see UL Solutions maintain its profitability and grow its market share.
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Management has kept the share count relatively flat, with a 0.12% CAGR over five years, which is a positive sign.
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The current of 57 and yield of 2.02% indicate that the stock is overvalued, especially given the target of an 8-10% owner earnings yield for a fair entry point.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 19.6% is in the top quintile for the sector (p80: 13.6%).
- 2 of 49.6% exceeds the top quintile cutoff of 43.4%.
- 3 of 17.8% matches the top quintile cutoff.
- 4 grew by 40.42% year-over-year, indicating strong cash generation.
Concerns
5- 1 of 57 is significantly higher than the typical range for stable businesses, indicating overvaluation.
- 2Net margin of 11.2% is below the sector's top quintile cutoff of 13.8%, suggesting weak .
- 3No yield over the past five years raises questions about .
- 4Negative market cap versus retained earnings of -8.52% indicates management is not effectively using retained earnings.
Price history
$65.99+88.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
UL Solutions generates revenue through its three segments: Industrial, Consumer, and Software and Advisory, with total revenue of $3.05 billion. The Industrial segment focuses on testing and certification services, while the Consumer segment provides safety testing for various products. The Software and Advisory segment helps clients manage regulatory requirements. Overall, the business model relies on ongoing demand for safety and compliance services, which are essential in various industries.
What other investors would say
The same company, judged by three other documented playbooks.
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