One-glance verdict
Undervalued
$156.45 our estimate vs market $79.63
Wall Street consensus: $91.33 (-41.6% lower than our fair-value estimate)
49% below our estimate, below the bear case
Fundamentals snapshot
Cabot Corporation
CBT · NYQ · Basic Materials · Specialty Chemicals
Current price
$79.63
52-week range
$58.33 - $94.53
Market cap
$4.11B
Balance sheet
Watch
8.17x Adequate
Net debt $1.04B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 13.3% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Reward Trades at 22.3x P/E vs peer median 71.9x (69.0% cheaper).
- Risk Stock trades 59.7% above its 5-year average P/E.
What this company does
Cabot Corporation
Cabot Corporation is an ingredients company that creates specialty chemicals used by other manufacturers to make their products better. A large part of its business comes from making "carbon black," a crucial material that strengthens car tires, but it also sells additives that improve everything from electric vehicle batteries to printer ink. Because its products are essential components, Cabot's success is often tied to the health of major industries like automotive and electronics, which buy these ingredients to build their final goods.
How the company got here
Founded in 1882 by Godfrey Lowell Cabot, the company started by patenting a device to make carbon black, a fine black powder. For over a century, Cabot grew into a leading global company by making this key material and expanding into related specialty chemicals. The company went public and began trading on the New York Stock Exchange in 1968. Over the years, it has expanded globally and developed new materials for things like inkjet printer ink and batteries. Recently, Cabot has focused on its core materials businesses by selling off other parts of the company and acquiring businesses that strengthen its main product lines.
What it actually does
Cabot is a specialty chemicals and performance materials company, which means it makes advanced materials that are used as ingredients to improve the products of other companies. You won't find Cabot's name on a store shelf, but its products are in many things you use every day. For example, they make materials that make tires stronger and more durable, help inks and coatings look better, and allow batteries to perform more efficiently. Essentially, Cabot provides critical, high-performance ingredients to manufacturers in industries like transportation, electronics, and consumer products.
Reinforcement Materials
This is Cabot's largest business segment and its original foundation. It primarily produces 'carbon black,' a material that is crucial for making rubber stronger and more resistant to wear and tear. The biggest customers for this segment are tire manufacturers, who use carbon black to improve tire safety, fuel efficiency, and lifespan. It's also used in other industrial rubber products like hoses, belts, and gaskets.
Performance Chemicals
This segment creates more specialized and higher-value materials for a wide variety of industries. It produces specialty carbons that are used to create the deep black color in plastics, inks, and coatings. This division also makes materials that are critical for manufacturing batteries for electric vehicles, as well as tiny particles called fumed silica and fumed alumina that are used in everything from adhesives and sealants to cosmetics and polishing powders.
What management is betting on now
Cabot's current strategy focuses on growing its core businesses and investing in sustainable and high-performance products. The company is particularly focused on materials for batteries, seeing the growth of electric vehicles as a major opportunity. It is also investing in what it calls 'circularity,' which means using recycled materials, like oil from old tires, to create new products. By acquiring smaller companies and expanding its manufacturing capabilities, Cabot aims to strengthen its position as a key supplier to major industries while also helping its customers meet their own sustainability goals.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$112.00M
FY2025 Q1
$47.00M
FY2025 Q2
$1.00M
FY2025 Q3
$188.00M
FY2025 Q4
$155.00M
FY2026 Q1
$57.00M
FY2026 Q2
$32.00M
FY2026 Q3
$37.00M
Revenue
$982.00M
Net income
$6.00M
Diluted EPS
0.12
Operating cash flow
$75.00M
Free cash flow
$37.00M
Fetching…
Sources
Revenue
$904.00M
Net income
$68.00M
Diluted EPS
1.27
Operating cash flow
$77.00M
Free cash flow
$32.00M
Fetching…
Sources
Revenue
$849.00M
Net income
$73.00M
Diluted EPS
1.37
Operating cash flow
$126.00M
Free cash flow
$57.00M
Fetching…
Sources
Revenue
$899.00M
Net income
$43.00M
Diluted EPS
0.80
Operating cash flow
$219.00M
Free cash flow
$155.00M
Fetching…
Sources
Revenue
$923.00M
Net income
$101.00M
Diluted EPS
1.86
Operating cash flow
$249.00M
Free cash flow
$188.00M
Fetching…
Sources
Revenue
$936.00M
Net income
$94.00M
Diluted EPS
1.69
Operating cash flow
$73.00M
Free cash flow
$1.00M
Fetching…
Sources
Revenue
$955.00M
Net income
$93.00M
Diluted EPS
1.67
Operating cash flow
$124.00M
Free cash flow
$47.00M
Fetching…
Sources
Revenue
$1.00B
Net income
$137.00M
Diluted EPS
2.41
Operating cash flow
$204.00M
Free cash flow
$112.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $156.45 vs current price $79.63
Wall Street consensus is the average analyst price target: $91.33 (-41.6% lower than our fair-value estimate).
Our most-likely fair value is $156.45 a share — about 96.5% above today's price of $79.63, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $1.0B. Interest coverage 8.2x.
Net debt
$1.04B
Interest coverage
8.17x
Cabot Corporation's profit covers its interest bill about 8.2 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
CBT
BASELINE
Cabot Corporation
Total debt $1.29B Interest coverage 8.17x This is the baseline the peer rows are being compared against.
Total debt $1.15B Interest coverage 1.63x -80% vs CBT Carries about 5.0x less debt cushion than CBT.
Total debt $1.48B Interest coverage 1.44x -82% vs CBT Carries about 5.7x less debt cushion than CBT.
Total debt $12.40B Interest coverage 1.09x -87% vs CBT Carries about 7.5x less debt cushion than CBT.
Total debt $2.50B Interest coverage -0.27x -100% vs CBT This peer has almost no interest-payment cushion compared with CBT.
Total debt $1.24B Interest coverage 3.40x -58% vs CBT Carries about 2.4x less debt cushion than CBT.
What you should know
The case for and against CBT
3 Rewards
1 Risk
Rewards
-
Returns 13.3% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 9/10 years.
-
Trades at 22.3x P/E vs peer median 71.9x (69.0% cheaper).
Risks
-
Stock trades 59.7% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
22.31x
Forward P/E
11.40x
P/B
2.56x
P/S
1.13x
EV/EBITDA
7.12x
PEG ratio
1.00x
Profitability
How much profit each dollar creates
Gross margin
24.2%
Operating margin
14.3%
Net margin
5.2%
ROE
13.3%
ROA
8.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.74x
Current ratio
1.47x
Quick ratio
0.86x
Total debt
$1.29B
Total cash
$250.00M
Growth
How the business has been compounding
Revenue TTM
$3.63B
Revenue 5Y CAGR
2.2%
EPS TTM
3.57
EPS 5Y CAGR
18.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$497.00M
Free CF TTM
$391.00M
FCF margin
10.8%
Dividend
Shareholder payout
Yield
2.3%
Payout ratio
51.0%
Last ex-div date
2026-08-28