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H.B. Fuller Co

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H.B. Fuller Co AI Insights

Informational only. Not investment advice.
As of 2026-01-14

Snapshot

  • Tangible book value is -554M with goodwill at 86% of equity (1.68B vs 1.96B) - significant impairment risk if adhesives demand softens.[Goodwill]
  • Interest expense TTM of 134M consumes 77% of pretax income (174M) - debt servicing leaves minimal margin for error.[Interest Expense]
  • Asset turnover TTM 0.69x vs industry median 0.20x - 3.5x capital efficiency advantage despite heavy M&A balance sheet.[Asset Turnover]

Watch Triggers

  • Interest Expense: Rises above 140M TTM or coverage falls below 2x — Current 2.3x EBIT coverage is thin - deterioration signals refinancing risk
  • Gross Margin: Falls below 28% from current 30.4% — Raw material inflation pass-through is key to thesis - margin compression kills FCF
  • Goodwill: Any impairment charge announced — At 86% of equity, even 10% writedown wipes 168M from book value

Bull Case

Operating margin TTM 10% vs industry median 0% - rare profitable specialty chemicals player with pricing power in adhesives niche.

Operating MarginGross Margin

5Y revenue CAGR 5.2% vs industry median 7.5% but with positive earnings - growth with discipline vs cash-burning peers.

Total Revenue 5yr GrowthNet Income

Bear Case

Net margin TTM 3.3% leaves no buffer - any revenue decline flows directly to losses given 134M fixed interest burden.

Net MarginInterest Expense

ROIC TTM 2.9% vs debt cost ~6.5% (implied) - destroying value on acquired capital until margins expand materially.

ROICTotal Debt

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
45%

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Forward Thesis

Deleveraging will unlock 50%+ EPS growth as interest burden declines from current 77% pretax consumption.

1-3ymed
  • FCF of 121M TTM available for debt paydown
  • No near-term maturities on 2.08B long-term debt
  • Operating income 349M provides coverage cushion
Interest expense 134M vs EBIT 308M = 2.3x coverageFCF margin 3.5% despite high capex (121M)Debt/equity 1.06x manageable if EBITDA stable

Valuation Context

Caveats

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