Cabot Corporation Common Stock (CBT)

FairStock Score: 57/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business: Cabot sells specialty chemicals and performance materials, notably reinforcing carbons for tires and industrial goods. Demand is tied to autos, construction, and broader industrial cycles, matching FairStock's computed Peter Lynch category: CYCLICAL — Specialty Chemicals, because earnings follow the economic cycle. From the numbers, I see a modest business rather than a wide moat: ROE is 13.35% and ROCE is 8.90%, not exceptional. The recent record is mixed. In fiscal Q3 2026, the quarter ended 2026-06-30, revenue was $982.0 million, up from $923.0 million in fiscal Q3 2025, but net income was only $6.0 million, or $0.12 per diluted share, versus $101.0 million and $1.86 a year earlier. That is a 94% profit drop and a 0.61% margin. Earlier quarters were better: fiscal Q2 2026 net income $68.0 million, fiscal Q1 2026 $73.0 million. Full-year FY2025 net income was $331.0 million, down from $380.0 million in FY2024 and $445.0 million in FY2023. Returns are moderate: D/E 0.74; Altman Z 2.17 and Piotroski 6/9 suggest neither fortress nor distress. Cash generation is a positive: trailing FCF $281.0 million, a 7.2% FCF yield on the $3.9B market cap. But at the 2026-10-13 close of $75.47, the stock sells for 21.14x earnings and 2.43x book. The Graham Number of $49.97 implies a negative margin of safety of about 51%. EV/EBITDA 7.40 tempers that somewhat. Dividend yield 2.38%. I would want evidence that the Q3 profit collapse is temporary, not structural. Until then, the price looks full for a cyclical with falling profits.

In plain English: Cabot makes specialty chemicals and materials, including ingredients used in tires and industrial rubber products. The business has been profitable and produces cash, but earnings fell sharply in the latest reported quarter. At the recent price, the stock looks more expensive than what its profits and assets alone would suggest, though its cash flow gives some support.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-06-30) · fiscal Q2 2026 10-Q (period ended 2026-03-31) · fiscal Q1 2026 10-Q (period ended 2025-12-31) · fiscal Q3 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-09-30) · FY2024 10-K (period ended 2024-09-30) · FY2023 10-K (period ended 2023-09-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer