Sims (SGM) AI Stock Analysis

• Market Cap: $2.92B
• Dividend Yield: 0.66%
• Average Volume (3M): 230.60K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: -19.23%
• EPS Growth: -176.61%
• Country: AU
• Employees: 3,887
• Sector: Basic Materials
• Sector Strength: 54
• Industry: Steel
• EPS (TTM): 0.18
• Shares Outstanding: 193,223,480
• 10 Day Avg. Volume: 253,068
• 30 Day Avg. Volume: 230,600
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 0.40
• Enterprise Value/Gross Profit: 2.99
• Enterprise Value/Ebitda: 9.61
• 1Y Price Target: $14.79
• Price Target Upside: 0.60% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 54 Neutral
• Price Target: AU$15.50 ▲(5.44%Upside)

The stock's overall score is driven by challenges in financial performance and poor valuation metrics, which are partially offset by positive signals from the earnings call regarding strategic improvements and cost reductions. Technical analysis further adds to the cautious outlook with bearish momentum indicators.

Positive Factors

Debt Management

SGM announced the sale of the UK business for total after-tax cash proceeds of ~A$385mn, which should help push the balance sheet to a zero net debt position.

Financial Performance

Incorporating the trading update and the closing of the UK divestment, the FY25 EBIT estimate is increased by 22% to A$170m.

Negative Factors

Valuation Concerns

SGM trades on 28x FY25 earnings which is viewed as unsustainably high given historical earnings volatility.

Sims Business Overview & Revenue Model

Company Description

Sims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminum, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, such as information technology assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, including electrical and electronic equipment. In addition, it provides secondary processing and other services comprising recycling of municipal curbside materials, stevedoring, and other sources of service. Sims Limited was founded in 1917 and is headquartered in Mascot, Australia.

How the Company Makes Money

Sims Limited generates revenue primarily through the collection, processing, and sale of recycled metals and electronics. Key revenue streams include the sale of ferrous and non-ferrous metals recovered from scrap materials, which are processed and sold to manufacturers and other end users. The company also profits from electronics recycling services, where it processes electronic waste to recover valuable materials like copper, aluminum, and precious metals. Additionally, Sims offers municipal recycling services, collaborating with local governments to manage and recycle household waste. Strategic partnerships with manufacturers and municipalities, along with global trading operations, significantly contribute to the company's earnings.

Sims Financial Statement Overview

Summary

Sims faces profitability and cash flow challenges despite a strong balance sheet. Negative net income and declining free cash flow highlight risks in operational efficiency and financial health, although there are positive signs in gross margin improvements.

Income Statement

Sims has struggled with revenue growth, seeing a decline in revenue from 2023 to 2024. The gross profit margin improved from 10.44% in 2023 to 27.51% in 2024, indicating better cost management. However, the net profit margin has turned negative due to a significant net loss in 2024, reflecting challenges in controlling operational expenses and financial costs.

Balance Sheet

The debt-to-equity ratio increased slightly from 0.30 in 2023 to 0.37 in 2024, indicating a moderate rise in leverage. The equity ratio remains stable, reflecting a strong balance sheet. Return on Equity (ROE) turned negative in 2024 due to net losses, which highlights profitability challenges despite a solid financial structure.

Cash Flow

Operating cash flow decreased significantly from 2023 to 2024, impacting free cash flow, which turned negative. The free cash flow to net income ratio is unfavorable, indicating cash generation issues despite some operational cash inflow. Overall cash flow management needs improvement to support future liquidity needs.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	7.20B	8.08B	9.28B	5.93B	4.92B
Gross Profit	1.04B	844.30M	1.15B	852.20M	1.66B
EBITDA	282.80M	523.00M	491.90M	230.60M	-41.50M
Net Income	-57.80M	181.10M	599.30M	229.40M	-265.30M
Balance Sheet
Total Assets	4.90B	4.71B	4.44B	3.68B	3.21B
Cash, Cash Equivalents and Short-Term Investments	280.80M	329.80M	267.50M	254.10M	243.10M
Total Debt	949.30M	804.80M	701.70M	557.10M	480.40M
Total Liabilities	2.34B	2.05B	1.90B	1.56B	1.22B
Stockholders Equity	2.56B	2.66B	2.54B	2.12B	1.98B
Cash Flow
Free Cash Flow	-12.10M	218.70M	273.10M	800.00K	-205.80M
Operating Cash Flow	202.50M	449.20M	547.80M	129.40M	-65.30M
Investing Cash Flow	-344.50M	-245.20M	-274.80M	-126.90M	-28.50M
Financing Cash Flow	-75.50M	-155.00M	-259.70M	10.40M	-67.90M

Sims Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SGM, the sentiment is Negative. The current price of 14.7 is below the 20-day moving average (MA) of 16.21, below the 50-day MA of 15.74, and above the 200-day MA of 14.13, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 26.13 is Positive, neither overbought nor oversold. The STOCH value of 8.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:SGM.

Sims Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGM	54 Neutral	$2.92B	―	-1.24%	0.66%	-19.23%	-176.61%
Sector *	44 Neutral	AU$1.44B	-5.92	-41.11%	4.24%	-3.35%	-41.14%
CIA	―	C$2.01B	23.12	5.89%	5.18%	―	―
BLSFF	―	$6.65B	19.99	5.09%	3.11%	―	―
MTGRF	―	$298.41M	65.86	-35.86%	―	―	―
BIS	76 Outperform	AU$191.14M	11.78	22.95%	8.15%	-2.79%	13.47%
VSL	63 Neutral	AU$806.53M	37.99	13.66%	2.28%	-15.83%	-61.60%

Sims Corporate Events

Sims Limited Partners with Alter Steel for Green Steel Initiative

Sims Limited has entered into a non-binding Memorandum of Understanding (MOU) with Alter Steel to supply up to 550,000 tonnes of ferrous scrap annually for Alter’s proposed Electric Arc Furnace in Queensland by 2028. This agreement marks a significant step in advancing the decarbonisation of steelmaking in Australia and New Zealand, aligning with the market’s shift towards onshoring steel production. The development of Sims’ Pinkenba site as a strategic logistics hub will enhance operational efficiency and market resilience, supporting the future feedstock needs of steelmakers in the region. The investment in Pinkenba, estimated at $215 million, will also enable the consolidation of Sims’ other sites, improving cost performance and climate change resilience.

The most recent analyst rating on (AU:SGM) stock is a Sell with a A$10.70 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Change in Substantial Holder’s Interest

Sims Limited has announced a change in the interests of a substantial holder, Allan Gray Australia Pty Ltd, which acts as an investment manager for various funds. The voting power of Allan Gray Australia has decreased from 16.49% to 15.28%, indicating a reduction in their stake in Sims Limited. This change may affect the company’s shareholder dynamics and could have implications for its governance and strategic decisions.

The most recent analyst rating on (AU:SGM) stock is a Sell with a A$10.70 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Quotation of New Securities on ASX

Sims Limited has announced the quotation of 2,606 ordinary fully paid securities on the Australian Securities Exchange (ASX). This move is part of the company’s ongoing efforts to enhance its financial flexibility and strengthen its market position, potentially impacting its stakeholders by providing increased liquidity and investment opportunities.

The most recent analyst rating on (AU:SGM) stock is a Sell with a A$11.50 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Quotation of New Securities on ASX

Sims Limited has announced the quotation of 4,152 ordinary fully paid securities on the Australian Securities Exchange (ASX) under the code SGM, effective from May 22, 2025. This move involves the issuance, transfer, or reclassification of securities due to options being exercised or convertible securities being converted, potentially impacting the company’s market presence and shareholder value.

The most recent analyst rating on (AU:SGM) stock is a Sell with a A$11.50 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Quotation of New Securities on ASX

Sims Limited has announced the quotation of 747 ordinary fully paid securities on the Australian Securities Exchange (ASX) as of May 14, 2025. This move is part of the company’s ongoing efforts to enhance its financial flexibility and market presence, potentially impacting its operational capabilities and stakeholder interests positively.

The most recent analyst rating on (AU:SGM) stock is a Sell with a A$11.50 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Board Changes as Thomas Gorman Retires

Sims Limited announced the retirement of non-executive Director Thomas Gorman from its board, following his appointment as Chair of the Alcoa Corporation Board of Directors. Gorman, who joined Sims in 2020, played a significant role in redefining the company’s strategic priorities and focusing on core businesses in high-potential markets. An independent search is underway for a new US-based non-executive director to fill the vacancy.

Sims Limited Rectifies Oversight in Director’s Interest Reporting

Sims Limited has reported a change in director’s interest, specifically involving the exercise and sale of options by Mr. Mikkelson, alongside the grant of performance shares and the lapse of certain options. The company acknowledged an administrative oversight in lodging the required documentation with the ASX but has since rectified the situation. Sims Limited assures stakeholders of its compliance with ASX Listing Rules through its Securities Trading Policy, which governs the notification of changes in interests.

Macquarie Bank Highlights Current Activities at Investor Conference

Macquarie Bank held an investor conference on May 7, 2025, presenting information about the Group’s current activities. The presentation emphasized that the material provided is a summary and should be considered alongside the Group’s periodic reporting and announcements. The document includes a disclaimer about forward-looking statements, highlighting the inherent risks and uncertainties that may impact actual results.