Q
Qnity Electronics, Inc.$124.07
Sell
Target $103.59
Report: Mar 07, 2026Technology • Semiconductors • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Price history unavailable (regenerate JSON with `FMP_API_KEY` to populate `charts.price_history`).
Pelican View
Current$124.07-16.5%
Rec: SellConviction: Low
Entry Target
N/A
N/A
Fair Value
$103.59
(17% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$140.60
52 Week Low$70.50
Avg. 3 Month Volume2.45M
Efficiency
LTM Gross Margin46.2%
LTM EBITDA Margin24.4%
LTM EBIT Margin20.8%
LTM Operating Margin20.4%
LTM ROA5.4%
LTM ROE7.3%
LTM ROIC22.8%
LTM ROCE8.4%
Capital Structure
Market Cap (MM)$24.2B
Enterprise Value (MM)$27.3B
Shares Outstanding211.40M
Total Debt (MM)$4.03B
Cash & Equivalents (MM)$915.00M
LTM Net Debt (MM)$3.11B
LTM Net Debt/EBITDA2.7x
Growth
TTM Rev. GrowthN/A
Last 3-Yr Rev. CAGRN/A
Last 3-Yr EBITDA CAGRN/A
Last 3-Yr EPS CAGRN/A
Valuation
Street Target Price$116.40
LTM EV/Revenue5.7x
LTM EV/Gross Profit12.4x
LTM EV/EBIT27.6x
LTM EV/EBITDA23.6x
LTM P/E35.0x
LTM EV/FCF27.6x
LTM P/FCF24.5x
LTM P/TB4.4x
LTM P/B3.4x
Dividend Yield0.1%
Payout Ratio4.1%
Executive SummarySituation: Current price is $124.07 versus fair value $103.59 (-16.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Transformation plan delivers first $50M EBITDA run-rate by mid-2026, addressing 780bps operating margin gap to peers via productivity gains; validates moat durability and offsets leverage fears. Bear case centers on Moat erosion from advanced-node disruption requiring new chemistries (e.g., 2nm hafnium ALD), impairing pricing power and ROIC from 22.8%. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
AI/HPC tailwinds drive 8-10% revenue growth with 46.2% gross margins persisting via 7,000-patent moat; $100M EBITDA uplift by 2028 from transformation; peer-discounted 6.1x EV/Sales offers re-rating to 10x median on 9.7% historical CAGR.
Bear Case
Cyclical downturn risks compress margins to 18% (2.8pp below base) as memory surplus hits volumes; 2.7x net leverage and -$1.54B tangible book erode floor amid $4.0B debt; no buybacks despite authorization signals poor allocation, with EV/FCF 29.5x above 3Y avg 26.3x.
Key Catalysts
Mid-Term (6-18 months)Impact: Moderate
Transformation plan delivers first $50M EBITDA run-rate by mid-2026, addressing 780bps operating margin gap to peers via productivity gains;...
Mid-Term (6-18 months)Impact: High
Qnity's high ROIC of 22.8% and stable 46.2% gross margins reflect a workflow-dependent moat in CMP slurries and photoresists, but $4.0B debt...
Long-Term (18+ months)Impact: Moderate
Qnity's post-spin traction (21.7% return vs SPY -0.6%) and recent analyst PTs ($134 Wolfe) make it relevant now, but Q1 high-single-digit gr...
Primary Risks
Concern: High
Moat erosion from advanced-node disruption requiring new chemistries (e.g., 2nm hafnium ALD), impairing pricing power and ROIC from 22.8%.
Concern: Medium
Leverage breach (2.7x net debt/EBITDA) if FCF misses $450-550M 2026 guide, triggering covenants (4.5x first-lien max).
Concern: Medium
Stewardship is adequate but unproven post-spin, with strong external track records (Kemp/Blinn) offset by net insider sales $499k and zero c...
Recent Activity
2026-01-21SEC Filing (SC 13G)
+7.96%BlackRock, Inc. reports 6.9% beneficial ownership of QNITY ELECTRONICS INC common stock as of 12/31/2025
2025-11-25Analyst Target
+6.08%Firm: RBC Capital Price Target: $110.00 Price When Posted: $76.95 Implied Upside: +42.9%
2025-11-20Analyst Target
-5.93%Firm: Mizuho Securities Price Target: $100.00 Price When Posted: $78.44 Implied Upside: +27.5%
2025-11-06SEC Filing (8-K)
-6.34%Qnity Electronics reports Q3 2025 estimated results with 11% net sales growth and spin-off completion
Valuation Table
9.8/10Decision Grade
Scenario Range
$61
Bear
$599
Base
$113
Bull
$124