One-glance verdict
Undervalued
$198.40 our estimate vs market $63.33
Wall Street consensus: $81.65 (-58.8% lower than our fair-value estimate)
68% below our estimate, below the bear case
Fundamentals snapshot
Westlake Corporation
WLK · NYQ · Basic Materials · Specialty Chemicals
Current price
$63.33
52-week range
$56.33 - $124.23
Market cap
$8.09B
Balance sheet
Distressed
-1.23x Concerning
Net debt $4.02B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.1% last year.
- Reward Free cash flow was positive in 9/10 years.
- Risk Return on equity was -11.9% last year — the company lost money on shareholders' equity.
- Risk Net debt grew 10.4% over 3 years.
What this company does
Westlake Corporation
Westlake Corporation makes basic building blocks for plastics and other materials used in things like pipes, windows, and even packaging. Most of their money comes from selling these essential chemicals and building products, which is important because these materials are used in a lot of everyday items and construction projects.
How the company got here
Westlake Corporation, originally founded in 1986 as Westlake Chemical Corporation, has grown into a major player in the materials industry. The company's journey has been marked by strategic expansion and a focus on integrating its operations. A key turning point was its name change to Westlake Corporation in February 2022, reflecting its broadened scope beyond just chemicals. It has established a significant presence across North America and internationally, building a reputation for producing essential and performance materials.
What it actually does
Westlake Corporation makes and sells a wide variety of materials that are used in everyday products and infrastructure. Think of the plastics in packaging, the pipes that bring water to your home, or the siding on houses – Westlake's products are often the building blocks for these items. They serve diverse markets, from construction and automotive to healthcare and consumer goods, providing fundamental components for countless industries.
Performance and Essential Materials
This segment is the engine for many of Westlake's core chemical products. It produces fundamental chemicals like ethylene and polyethylene, which are the basic ingredients for many plastics. It also manufactures chlor-alkali products, which are used in everything from water treatment to making PVC. These materials are sold to other businesses that use them to create a vast array of finished goods, forming a significant portion of Westlake's overall business.
Housing and Infrastructure Products
This part of Westlake focuses on finished goods that are directly used in building and maintaining homes and infrastructure. They make products like PVC siding and trim for houses, windows, and even roofing tiles. Additionally, they produce PVC pipes and fittings essential for water and sewer systems, as well as various consumer products like mats and edging. This segment directly contributes to the construction and renovation markets, representing a substantial part of the company's revenue.
What management is betting on now
Westlake's leadership is focused on leveraging its integrated business model to drive growth and profitability. They aim to capitalize on the demand for both essential materials and housing products, benefiting from their strong market positions. A key strategy involves optimizing their manufacturing processes and expanding their product offerings to meet evolving customer needs. This approach allows them to adapt to market changes and maintain a competitive edge in the diverse sectors they serve.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$254.00M
FY2024 Q4
$149.00M
FY2025 Q1
$-325.00M
FY2025 Q2
$-132.00M
FY2025 Q3
$-57.00M
FY2025 Q4
$-16.00M
FY2026 Q1
$-303.00M
FY2026 Q2
$111.00M
Revenue
$3.27B
Net income
$260.00M
Diluted EPS
2.01
Operating cash flow
$318.00M
Free cash flow
$111.00M
Fetching…
Sources
Revenue
$2.65B
Net income
$-169.00M
Diluted EPS
-1.31
Operating cash flow
$-94.00M
Free cash flow
$-303.00M
Fetching…
Sources
Revenue
$2.53B
Net income
$-544.00M
Diluted EPS
-4.22
Operating cash flow
$225.00M
Free cash flow
$-16.00M
Fetching…
Sources
Revenue
$2.84B
Net income
$-782.00M
Diluted EPS
-6.06
Operating cash flow
$182.00M
Free cash flow
$-57.00M
Fetching…
Sources
Revenue
$2.95B
Net income
$-142.00M
Diluted EPS
-1.11
Operating cash flow
$135.00M
Free cash flow
$-132.00M
Fetching…
Sources
Revenue
$2.85B
Net income
$-40.00M
Diluted EPS
-0.31
Operating cash flow
$-77.00M
Free cash flow
$-325.00M
Fetching…
Sources
Revenue
$2.84B
Net income
$7.00M
Diluted EPS
0.07
Operating cash flow
$434.00M
Free cash flow
$149.00M
Fetching…
Sources
Revenue
$3.12B
Net income
$108.00M
Diluted EPS
0.83
Operating cash flow
$474.00M
Free cash flow
$254.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $198.40 vs current price $63.33
Wall Street consensus is the average analyst price target: $81.65 (-58.8% lower than our fair-value estimate).
Our most-likely fair value is $198.40 a share — about 213.3% above today's price of $63.33, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $4.0B. Interest coverage -1.2x.
Net debt
$4.02B
Interest coverage
-1.23x
Westlake Corporation's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
WLK
BASELINE
Westlake Corporation
Total debt $5.88B Interest coverage -1.23x This is the baseline the peer rows are being compared against.
Total debt $5.47B Interest coverage 4.37x This peer still has a real interest-payment cushion, while WLK does not.
Total debt $12.40B Interest coverage 1.09x This peer still has a real interest-payment cushion, while WLK does not.
Total debt $3.41B Interest coverage 0.21x This peer still has a real interest-payment cushion, while WLK does not.
Total debt $2.74B Interest coverage 8.66x This peer still has a real interest-payment cushion, while WLK does not.
Total debt $2.00B Interest coverage 0.32x This peer still has a real interest-payment cushion, while WLK does not.
What you should know
The case for and against WLK
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.1% last year.
-
Free cash flow was positive in 9/10 years.
-
Dividend yield is 3.4% with 23-year payout history.
Risks
-
Return on equity was -11.9% last year — the company lost money on shareholders' equity.
-
Net debt grew 10.4% over 3 years.
-
Operating margin compressed from 19.7% to 11.2% over 3 years.
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)
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Forward P/E
23.83x
P/B
0.93x
P/S
0.72x
EV/EBITDA
11.22x
PEG ratio
1.70x
Profitability
How much profit each dollar creates
Gross margin
10.2%
Operating margin
11.2%
Net margin
-10.9%
ROE
-11.9%
ROA
0.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.64x
Current ratio
2.45x
Quick ratio
1.65x
Total debt
$5.88B
Total cash
$1.85B
Growth
How the business has been compounding
Revenue TTM
$11.29B
Revenue 5Y CAGR
-1.3%
EPS TTM
-9.58
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$631.00M
Free CF TTM
$-530.00M
FCF margin
-4.7%
Dividend
Shareholder payout
Yield
3.4%
Payout ratio
69.6%
Last ex-div date
2026-08-25