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Valhi Inc (VHI)
NYSE:VHI
US Market

Valhi (VHI) AI Stock Analysis

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VH

Valhi

(NYSE:VHI)

60Neutral
Valhi's overall stock score is driven by its solid financial performance, particularly its revenue growth and improved profitability. However, technical analysis indicates bearish momentum, which could limit short-term stock appreciation. The stock's attractive valuation, with a low P/E ratio and reasonable dividend yield, adds support to its appeal. Despite these positives, the company's high liabilities and volatile cash flows present ongoing risks, necessitating careful management to sustain growth.

Valhi (VHI) vs. S&P 500 (SPY)

Valhi Business Overview & Revenue Model

Company DescriptionValhi, Inc. (VHI) is a diversified holding company that operates in various industries through its subsidiaries. The company primarily engages in the chemicals, component products, and real estate management sectors. Valhi's chemical operations are conducted through its majority-owned subsidiary Kronos Worldwide, Inc., which is a global producer and marketer of titanium dioxide pigments. The component products segment, operated through CompX International Inc., manufactures security products and precision ball bearing slides. Valhi also manages real estate investments through its subsidiary Basic Management, Inc.
How the Company Makes MoneyValhi, Inc. generates revenue through its diversified operations in chemicals, component products, and real estate management. The chemical segment, which is the largest revenue contributor, primarily earns money from the production and sale of titanium dioxide pigments used in a wide range of applications, including coatings, plastics, and paper. The component products segment generates income by manufacturing and selling security products such as locks and access control devices, as well as precision ball bearing slides used in various industries. Additionally, Valhi derives revenue from its real estate management activities, including property development and leasing operations. The company's earnings are significantly influenced by global economic conditions, demand for titanium dioxide, and housing market trends.

Valhi Financial Statement Overview

Summary
Valhi shows a mix of strengths and weaknesses across its financial statements. Revenue growth and improved profitability are positive signs, but the low net profit margin and high liabilities could present future challenges. The cash flow situation has improved but remains volatile, necessitating careful liquidity management. Overall, the company is on a recovery path but must continue addressing cost efficiency and leverage issues to ensure sustainable growth.
Income Statement
65
Positive
Valhi's revenue showed a positive growth trajectory, increasing from previous periods, particularly with a recovery from a negative EBIT and net income in 2023 to a positive margin in 2024. The gross profit margin improved significantly, indicating better cost management or pricing power. However, the net profit margin remains relatively low, suggesting ongoing challenges in efficiency or cost control.
Balance Sheet
70
Positive
Valhi's balance sheet shows a stable equity base with a reasonable debt-to-equity ratio, reflecting manageable leverage. The equity ratio is healthy, indicating a strong asset base relative to equity. However, the overall liabilities remain high, which could pose risks if revenue growth slows or costs rise unexpectedly.
Cash Flow
60
Neutral
The company has shown improvement in operating cash flows, moving from negative to positive free cash flow. The free cash flow to net income ratio indicates that cash flows are supporting earnings, though cash reserves have declined, potentially limiting flexibility. The volatility in cash flow suggests potential risks in maintaining liquidity.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.17B1.92B2.22B2.30B1.85B
Gross Profit
486.30M245.20M490.40M580.20M412.10M
EBIT
230.10M-19.50M139.30M231.00M68.30M
EBITDA
360.80M62.90M256.30M349.60M205.30M
Net Income Common Stockholders
108.00M-12.10M136.10M197.70M84.70M
Balance SheetCash, Cash Equivalents and Short-Term Investments
350.20M463.10M553.60M701.00M523.00M
Total Assets
2.80B2.74B2.84B3.01B2.89B
Total Debt
584.00M569.00M580.70M672.50M814.10M
Net Debt
235.70M162.00M102.20M-25.90M295.50M
Total Liabilities
1.42B1.48B1.53B1.85B1.88B
Stockholders Equity
1.04B935.80M958.60M829.50M682.50M
Cash FlowFree Cash Flow
13.10M-44.60M-32.70M395.60M86.70M
Operating Cash Flow
44.00M3.90M34.90M459.70M152.20M
Investing Cash Flow
-125.00M-29.00M-146.70M-37.40M-57.00M
Financing Cash Flow
-2.30M-75.90M-114.00M-189.10M-122.50M

Valhi Technical Analysis

Technical Analysis Sentiment
Negative
Last Price17.53
Price Trends
50DMA
20.42
Negative
100DMA
24.89
Negative
200DMA
23.97
Negative
Market Momentum
MACD
-1.13
Negative
RSI
41.12
Neutral
STOCH
64.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VHI, the sentiment is Negative. The current price of 17.53 is below the 20-day moving average (MA) of 17.86, below the 50-day MA of 20.42, and below the 200-day MA of 23.97, indicating a bearish trend. The MACD of -1.13 indicates Negative momentum. The RSI at 41.12 is Neutral, neither overbought nor oversold. The STOCH value of 64.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VHI.

Valhi Risk Analysis

Valhi disclosed 17 risk factors in its most recent earnings report. Valhi 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

Valhi Peers Comparison

Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
KRKRO
61
Neutral
$875.42M10.1510.61%6.31%13.24%
VHVHI
60
Neutral
$496.01M4.4710.95%1.89%9.53%
OLOLN
55
Neutral
$2.85B26.495.10%3.32%-4.29%-74.85%
CCCC
53
Neutral
$2.04B23.4912.98%7.43%-4.05%
51
Neutral
$1.09B-2.60%7.26%7.82%84.90%
HUHUN
50
Neutral
$3.01B-5.22%5.79%-1.23%-277.52%
47
Neutral
$2.64B-3.85-29.39%3.32%2.72%-29.67%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VHI
Valhi
17.53
2.59
17.34%
HUN
Huntsman
16.52
-8.14
-33.01%
KRO
Kronos Worldwide
7.56
-3.68
-32.74%
OLN
Olin
23.36
-33.33
-58.79%
TROX
TRONOX
6.94
-8.78
-55.85%
CC
Chemours Company
13.96
-11.52
-45.21%

Valhi Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Valhi Achieves Financial Turnaround with Improved Net Income
Positive
Nov 7, 2024

Valhi, Inc. reported a significant turnaround in its financial performance for the third quarter and first nine months of 2024, with net income of $57.5 million compared to a loss in the previous year, driven by strong results from its Chemicals Segment. The acquisition of a joint venture interest in Louisiana Pigment Company contributed to a substantial non-cash gain, boosting net sales and operating income. Despite lower TiO2 prices, increased sales volumes and reduced production costs lifted the Chemicals Segment, while other segments faced challenges due to decreased sales and development delays.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.