One-glance verdict
Undervalued
$191.10 our estimate vs market $73.79
Wall Street consensus: $90.33 (-52.7% lower than our fair-value estimate)
61% below our estimate, below the bear case
Fundamentals snapshot
Cabot Corporation
CBT · NYQ · Basic Materials · Specialty Chemicals
Current price
$73.79
52-week range
$58.33 - $94.53
Market cap
$3.81B
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 20.7x P/E vs peer median 73.9x (72.0% cheaper).
- Risk Stock trades 48.0% above its 5-year average P/E.
What this company does
Cabot Corporation
Cabot Corporation makes special chemicals and materials that go into everyday things like tires, batteries, and even makeup. The money they make mainly comes from selling these ingredients to other businesses around the world. This matters because their products are essential building blocks for many industries, meaning their success is tied to how well those industries are doing.
How the company got here
Cabot Corporation has a long history, founded way back in 1882. It started by focusing on carbon black, a key ingredient in many products. Over the decades, the company grew and evolved, expanding its offerings beyond just carbon black. This journey has positioned Cabot as a significant player in the specialty chemicals and performance materials industry, serving a wide range of global markets.
What it actually does
Cabot Corporation makes and sells specialty chemicals and performance materials. Think of these as ingredients that make other products work better or have specific qualities. For example, they make materials that strengthen rubber for tires, add color and conductivity to plastics, and improve the performance of inks and coatings. These aren't products you'd typically buy off the shelf, but they are essential components in many everyday items and industrial applications.
Reinforcement Materials
This segment is all about materials that make other things stronger and more durable, primarily for the rubber industry. The main product here is reinforcing carbons, which are like tiny particles that get mixed into rubber to make it tougher. This is especially important for tires, helping them last longer and perform better. These materials are also used in other industrial rubber goods like hoses and belts. This business is a significant part of Cabot's overall operations.
Performance Chemicals
This part of Cabot focuses on specialty carbons and other advanced materials that give products unique properties. These are used in a wide variety of applications, such as making inks blacker, improving the conductivity of plastics for electronics, and enhancing the performance of batteries, especially for electric vehicles. They also produce fumed silica and alumina, which are used in everything from cosmetics and pharmaceuticals to coatings and adhesives. This segment represents a diverse range of high-value chemical products.
What management is betting on now
Cabot's management is focused on growing its specialty businesses and innovating with new materials. They are particularly interested in areas like battery materials, which are crucial for the growing electric vehicle market. The company is also investing in sustainable solutions and expanding its presence in key global markets. The goal is to leverage their expertise in chemistry to create advanced materials that meet the evolving needs of industries worldwide.
Price history
How the share price has moved
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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 $191.10 vs current price $73.79
Wall Street consensus is the average analyst price target: $90.33 (-52.7% lower than our fair-value estimate).
Our most-likely fair value is $191.10 a share — about 159.0% above today's price of $73.79, 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 20.7x P/E vs peer median 73.9x (72.0% cheaper).
Risks
-
Stock trades 48.0% 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)
20.67x
Forward P/E
10.56x
P/B
2.37x
P/S
1.05x
EV/EBITDA
6.76x
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
2.5%
Payout ratio
51.0%
Last ex-div date
2026-08-28