Valhi (VHI) Stock Forecast & Price Target

Valhi Inc. is projected to experience significant financial growth, with EBITDA expected to rise at a 37% compound annual growth rate (CAGR), increasing from $25 million in FY25 to $47 million by FY27, alongside an expansion in EBITDA margin from 24.2% to 30.1%. Additionally, the company's earnings per share (EPS) is anticipated to increase by 23% over the next 12 months, substantially outpacing the growth rates of Canadian software consolidator peers, which are forecasted at 12% and 13%, respectively. This combination of robust EBITDA growth and strong EPS performance underscores a positive outlook for Valhi's stock, driven by operational leverage and efficient market positioning within its segments.

Valhi Inc. faces significant headwinds, particularly within its Attend Anywhere platform, which has experienced a substantial 57% revenue decline over the past two years to £5.0 million in FY25 due to pricing pressures and competition from Microsoft Teams. Additionally, overall productivity within the NHS has not returned to pre-pandemic levels, with current estimates indicating productivity is 11% below those levels, further complicating revenue generation for related services. Lastly, the projected decrease in EBITDA margin from 26.4% in Q2/FY25 to an anticipated 21.5% in Q3/FY25 raises concerns about the company's profitability trajectory in the near term.