USLM

We rate UNITED STATES LIME & MINERALS INC (USLM) as a Reduce with a composite score of 45.8/100 at a current price of $111.89. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (72th percentile) and stability (70th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (30th percentile) and investment (34th percentile) tempers our overall conviction. We assign a Narrow Moat rating (57/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

UNITED STATES LIME & MINERALS INC holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.8/100 places it at rank #2670 in our full 7,333-stock universe. At $3.8B in market capitalization, UNITED STATES LIME & MINERALS INC is a mid-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 33%, though momentum at the 30th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 49% (+5.7pp vs sector) narrow to operating margins of 43% (+30.4pp vs sector) and net margins of 36.6%, yielding a gross-to-net conversion rate of 75%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $111.89, UNITED STATES LIME & MINERALS INC is trading near fair value based on current fundamentals. Our value factor score of 49/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 22.8x (a 66% premium to the sector median of 13.7x), EV/EBITDA of 19.5x (at a premium), P/B of 5.2x, P/S of 8.3x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to UNITED STATES LIME & MINERALS INC. The company exhibits strong financial stability with a beta of 1.12, conservative leverage (0% D/E), and a stability factor in the 70th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 70th percentile with quality at the 72th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 49% provide a buffer against cost pressures; conservative leverage (0% D/E) limits balance sheet risk; above-average stability (70th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate UNITED STATES LIME & MINERALS INC's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 22.8%, disciplined leverage (0% D/E), best-in-class net margins of 36.6%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — UNITED STATES LIME & MINERALS INC meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 0.17% dividend yield, and the combination of 21.0% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, UNITED STATES LIME & MINERALS INC receives a Reduce rating with a composite score of 45.8/100 (rank #2670 of 7,333). Our quantitative framework assigns a Narrow Moat (57/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 51/100.

Our analysis does not support a constructive view on UNITED STATES LIME & MINERALS INC at this time. The combination of the current quantitative profile, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.