Sociedad Quimica y Minera S.A. Common Stock (SQM)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Generates $430 million in annual free cash flow (1.8% yield on market cap)
• Revenue growth of 23.3% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($30) with negative 180% margin of safety—limited downside protection

AI Analysis

Sociedad Quimica y Minera S.A. Common Stock is a mid-cap basic materials company valued at $24.3 billion. The business generates $4.6 billion in annual revenue with a 4.0% net margin and $430 million in free cash flow. From a quality standpoint, Sociedad shows healthy Altman Z-Score of 3.2 and modest 10% ROE. On valuation, the stock is commanding a steep 41.5x multiple, with trades far above its Graham Number ($30) with no margin of safety. Growth dynamics show revenue growing at 23.3% and profit growth of 53.0%. The 1.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 44/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Sociedad's 23% revenue growth trajectory could accelerate as it captures additional market share in the basic materials sector. With $430 million in annual free cash flow (1.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 41x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer