10Y annualized return is
average
at 8.2% per year
ECL has met or exceeded earnings expectations in
the majority of
recent quarters (7/10)
Strong Return on Equity
Healthy Gross Profit Margin
Strong Interest Coverage
🏆 Record Performance
🔒 Strong Competitive Position
🚀 Innovation and Investment Focus
📈 Growth Targets and Confidence
🔌 Digital Transformation Potential
High Price-to-Earnings Ratio
Moderate Net Profit Margin
Moderate Debt Levels
⚠️ Challenges in International Markets
🔄 Currency Headwinds
Ecolab Inc. is demonstrating strong business quality with a solid competitive position and innovative growth strategies. The company's focus on digital transformation and targeted investments in high-growth markets supports favorable future prospects. However, challenges in international growth and currency headwinds may pose risks to achieving its full potential.
Analysis Date: February 11, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Ecolab Inc. is a company that helps businesses keep their water clean and their environments safe and sanitary. They provide cleaning products and solutions for a variety of industries, like restaurants, healthcare, and manufacturing. Ecolab also helps organizations manage pests and reduce water and energy use. Essentially, they focus on making sure places are healthy and safe for both people and products.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
Ecolab (ECL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the...
Ecolab announces a 5% U.S. trade surcharge to offset rising costs.
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$285.48
Current Market Price: $236.73
IV/P Ratio: 1.21x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
17.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ECL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (32.07)
P/B ratio ≤ 1.5 (7.73)
Current ratio ≥ 2.0 (1.26x)
Long-term debt < Net current assets (6.10x)
Margin of safety (17.0%)
ECL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
25.00%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
43.49%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
13.42%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
ECL's gross profit margin of approximately 43.49% reflects strong pricing power and cost management, indicating a solid foundation for profitability.
While ECL has a net profit margin of 13.42%, it may suggest room for improvement in controlling costs relative to revenue.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.93x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.26x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
ECL has an interest coverage ratio of 8.78, indicating that the company can easily meet its interest obligations, reflecting a strong financial position.
With a debt-to-equity ratio of 0.93, ECL is moderately leveraged, indicating potential risks associated with higher debt levels in adverse conditions.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Ecolab Inc. reported record sales, earnings, margins, and free cash flow for 2024, indicating strong operational performance and effective management. The company's organic operating income margin increased by 290 basis points year-over-year, showcasing consistent margin improvement.
Ecolab's business model is characterized by high customer retention and loyalty, with 92% of sales produced locally, protecting it from external tariff impacts. The company also leverages proprietary technology, enhancing customer engagement and increasing stickiness of its services.
The company is investing significantly in its digital initiatives, particularly Ecolab Digital and its high-tech business targeting data centers and microelectronics, which are expected to drive future growth and margin expansion.
While the U.S. market is performing strongly, international sales growth remains low single digits due to uneven macroeconomic trends, which may pose risks to overall revenue growth.
Ecolab is targeting 12 to 15% earnings growth for 2025, supported by solid organic sales growth and strong performance in its high-growth segments, including data centers and life sciences.
The company plans to enhance transparency by reporting digital sales starting in 2025, which is expected to reveal high-growth opportunities and provide better visibility on its innovation trajectory.
Ecolab expects currency translation to negatively impact reported sales growth by approximately 3% and adjusted EPS growth by about 4%, which could hinder overall financial performance.