Sims (SGM) AI Stock Analysis

• Market Cap: AU$3.92B
• Dividend Yield: 1.27%
• Average Volume (3M): 781.77K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.51
• Revenue Growth: 3.98%
• EPS Growth: 70.79%
• Country: AU
• Employees: 3,887
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.31
• Shares Outstanding: 193,232,990
• 10 Day Avg. Volume: 762,054
• 30 Day Avg. Volume: 781,775
• PEG Ratio: 2.32
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 28.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$20.36
• Price Target Upside: 0.10% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.92
• Revenue Forecast (FY): AU$7.92B

• Rating: 60 Neutral
• Price Target: AU$24.00 ▲(17.99% Upside)
• Action: Upgraded Date: 01/29/26
• Date: Action: Upgraded 01/29/26

The score is driven by mixed financial performance (improving revenue and gross margin but weak profitability and declining free cash flow) alongside a strong technical uptrend with overheated momentum indicators. Earnings call commentary supports the rating with evidence of a turnaround and efficiency gains, but working-capital-driven leverage and ferrous market pressure remain key risks. Valuation is a headwind due to a negative P/E and only a modest dividend yield.

Positive Factors

Revenue and gross margin improvement

Sims' revenue growth and materially higher gross margin reflect sustained improvement in pricing, mix and processing efficiency. These durable margin gains provide structural protection versus commodity swings and support longer-term profitability if volume and mix remain stable.

Operational turnaround (EBITDA/EBIT)

A near‑50% EBITDA lift and ~200% EBIT increase show meaningful structural improvement from margin-led actions and cost rationalisation. This indicates management can extract operating leverage and sustain higher earnings power even if volumes fluctuate.

Diversified growth: nonferrous and SLS

Stronger nonferrous mix and SLS expansion diversify revenue away from volatile ferrous markets. Nonferrous demand (copper/aluminum) and SLS exposure to AI/datacenter growth create structural tailwinds and improve margin resilience over the medium term.

Negative Factors

Negative profitability metrics

Despite margin improvements, reported net and EBIT margins remain negative, indicating earnings are not yet consistently profitable. Persistent negative margins limit retained earnings, constrain reinvestment and raise risk that cyclical downcycles erode gains.

Weak free cash flow generation

A steep decline in free cash flow growth signals weaker cash conversion of earnings and higher working capital absorption. This reduces funding available for capex, dividends or debt reduction and makes the company more sensitive to credit and liquidity shocks.

Working capital increase and higher net debt

A $110m working capital build pushed net debt to $332m and leverage beyond target range. Elevated leverage tied to inventories/receivables reduces financial flexibility, raises refinancing risk and constrains ability to invest or weather prolonged ferrous market weakness.

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 generates revenue primarily through the sale of recycled metals and materials sourced from its collection and processing operations. Key revenue streams include the recycling of ferrous and non-ferrous metals, which are sold to manufacturers and industrial customers, as well as the management and recycling of electronic waste. The company also earns income from various environmental services, such as waste management consulting and sustainability programs. Significant partnerships with manufacturers and local governments enhance Sims' ability to secure a steady supply of recyclable materials, contributing to its earnings.

Sims Financial Statement Overview

Summary

Mixed fundamentals: revenue grew 10.87% and gross margin improved to 28.67%, but profitability remains weak with negative net margin (-0.25%) and negative EBIT margin (-0.12%). Balance sheet leverage is manageable (debt-to-equity 0.30), yet returns are poor (ROE -0.73%). Cash generation is a concern with free cash flow growth down -57.7%.

Income Statement

Sims has shown a mixed performance in its income statement. The company experienced a revenue growth rate of 10.87% in the latest year, indicating a positive trend. However, the net profit margin is negative at -0.25%, reflecting challenges in profitability. The gross profit margin improved significantly to 28.67%, suggesting better cost management. Despite these improvements, the negative EBIT margin of -0.12% highlights ongoing operational inefficiencies.

Balance Sheet

The balance sheet of Sims shows moderate stability. The debt-to-equity ratio stands at 0.30, indicating a manageable level of leverage. However, the return on equity is negative at -0.73%, pointing to inefficiencies in generating returns for shareholders. The equity ratio is relatively strong, suggesting a solid capital structure, but the negative ROE remains a concern.

Cash Flow

Sims' cash flow statement reveals some challenges. The free cash flow growth rate is significantly negative at -57.7%, indicating a decline in cash generation. The operating cash flow to net income ratio is 0.31, suggesting some ability to convert income into cash. However, the free cash flow to net income ratio of 0.35 highlights potential issues in sustaining cash flow levels.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	7.63B	7.49B	7.20B	8.08B	9.28B	5.93B
Gross Profit	1.25B	2.15B	1.04B	844.30M	1.15B	852.20M
EBITDA	324.70M	345.10M	381.00M	523.00M	491.90M	230.60M
Net Income	-58.30M	-19.00M	-57.80M	181.10M	599.30M	229.40M
Balance Sheet
Total Assets	4.34B	4.45B	4.90B	4.71B	4.44B	3.68B
Cash, Cash Equivalents and Short-Term Investments	106.10M	215.60M	280.80M	329.80M	267.50M	254.10M
Total Debt	959.10M	787.70M	784.40M	804.80M	701.70M	557.10M
Total Liabilities	1.84B	1.86B	2.34B	2.05B	1.90B	1.56B
Stockholders Equity	2.50B	2.59B	2.56B	2.66B	2.54B	2.12B
Cash Flow
Free Cash Flow	-72.60M	103.00M	-12.10M	218.70M	273.10M	800.00K
Operating Cash Flow	104.50M	297.10M	202.50M	449.20M	547.80M	129.40M
Investing Cash Flow	-169.50M	-64.50M	-344.50M	-245.20M	-274.80M	-126.90M
Financing Cash Flow	-21.30M	-142.40M	-75.50M	-155.00M	-259.70M	10.40M

Sims Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 20.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SGM, the sentiment is Neutral. The current price of 20.34 is below the 20-day moving average (MA) of 21.23, above the 50-day MA of 19.99, and above the 200-day MA of 16.29, indicating a neutral trend. The MACD of 0.43 indicates Positive momentum. The RSI at 44.16 is Neutral, neither overbought nor oversold. The STOCH value of 22.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:SGM.

Sims Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BIS	78 Outperform	AU$226.27M	7.02	25.46%	7.62%	-0.03%	23.78%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
VSL	61 Neutral	AU$956.84M	33.43	9.13%	0.86%	-12.17%	-61.32%
SGM	60 Neutral	AU$3.92B	-28.99	0.14%	1.27%	3.98%	70.79%
CIA	59 Neutral	AU$2.82B	11.40	8.25%	3.66%	0.40%	-53.09%
BSL	57 Neutral	AU$12.17B	6.75	0.73%	2.48%	-4.46%	-89.42%
MGX	52 Neutral	AU$548.90M	-6.44	-16.34%	―	-48.05%	-1394.34%

Sims Corporate Events

Sims consolidates Houston footprint with Tri Coastal deal and Mayo Shell sale

Sims Limited has moved to streamline its presence in Houston, agreeing to acquire the assets of scrap processor Tri Coastal Trading for US$66.5 million while concurrently arranging the sale of its non-operating Mayo Shell property. The deal consolidates Sims’ local ferrous operations onto TCT’s site, secures long-term access to a deep-sea dock via an 18-year service agreement with Enstructure, and is expected to materially lower operating and administrative costs.

By shifting to the Galena Park facility and divesting its wider Houston land portfolio, Sims aims to avoid significant capital expenditure, unlock more than US$100 million in property sale proceeds, and recycle capital into higher-return projects. The company forecasts an EBITDA multiple of under four times on the acquisition and a post-synergy ROIC above 20 per cent, with combined Houston EBITDA projected to exceed US$25 million under current market pricing, reinforcing its strategic focus on portfolio optimisation and capital efficiency.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$21.50 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.