Sims (SGM) AI Stock Analysis

• Market Cap: AU$3.91B
• Dividend Yield: 1.27%
• Average Volume (3M): 781.77K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.46
• Revenue Growth: 3.98%
• EPS Growth: 70.79%
• Country: AU
• Employees: 3,887
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.24
• 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$16.74
• Price Target Upside: -17.47% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: AU$21.50 ▲(6.02% Upside)

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

Nonferrous Revenue Mix

A larger nonferrous mix reduces reliance on volatile ferrous cycles and captures higher-value metal margins. Sustained demand for copper and aluminum supports structural revenue diversification and resilience in earnings across commodity cycles over the next 2–6 months.

SLS (Electronics) Growth

Growth in electronics recycling tied to AI and data center expansion is a structural tailwind. Higher-margin services and repurposed unit sales create recurring, less cyclical revenue and improve portfolio mix, supporting durable earnings and margin stability.

Margin Improvement & Cost Discipline

Significant EBITDA/EBIT gains reflect lasting operational improvements: prioritizing margin over volume, higher shredder utilization, and targeted cost savings. These structural changes enhance long-term profitability potential and operating leverage if maintained.

Negative Factors

Negative Return on Equity

A negative ROE signals the company is not generating sufficient returns on shareholder capital, indicating structural inefficiencies or underperforming assets. Persistently negative ROE can undermine investor confidence and limit reinvestment capacity over months.

Weakened Cash Generation

A sharp decline in free cash flow growth reduces financial flexibility for capex, dividends, or strategic investments. Lower cash conversion elevates refinancing and working capital risks, constraining the company's ability to capitalize on long-term opportunities.

Ferrous Market Exposure

Material exposure to ferrous markets exposes earnings to global steel cycles and Chinese overproduction. Structural external price pressure can compress margins and volumes for months, limiting the durability of group-wide profitability despite improvements elsewhere.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.51B	7.49B	7.20B	8.08B	9.28B	5.93B
Gross Profit	989.80M	2.15B	1.04B	844.30M	1.15B	852.20M
EBITDA	176.50M	345.10M	381.00M	523.00M	491.90M	230.60M
Net Income	-19.00M	-19.00M	-57.80M	181.10M	599.30M	229.40M
Balance Sheet
Total Assets	4.45B	4.45B	4.90B	4.71B	4.44B	3.68B
Cash, Cash Equivalents and Short-Term Investments	215.60M	215.60M	280.80M	329.80M	267.50M	254.10M
Total Debt	787.70M	787.70M	784.40M	804.80M	701.70M	557.10M
Total Liabilities	1.86B	1.86B	2.34B	2.05B	1.90B	1.56B
Stockholders Equity	2.59B	2.59B	2.56B	2.66B	2.54B	2.12B
Cash Flow
Free Cash Flow	103.00M	103.00M	-12.10M	218.70M	273.10M	800.00K
Operating Cash Flow	297.10M	297.10M	202.50M	449.20M	547.80M	129.40M
Investing Cash Flow	-64.50M	-64.50M	-344.50M	-245.20M	-274.80M	-126.90M
Financing Cash Flow	-142.40M	-142.40M	-75.50M	-155.00M	-259.70M	10.40M

Sims Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.28
• 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 Positive. The current price of 20.28 is above the 20-day moving average (MA) of 19.59, above the 50-day MA of 18.14, and above the 200-day MA of 15.64, indicating a bullish trend. The MACD of 0.71 indicates Positive momentum. The RSI at 68.03 is Neutral, neither overbought nor oversold. The STOCH value of 71.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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$269.03M	14.18	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$1.02B	64.78	9.13%	0.86%	-12.17%	-61.32%
SGM	60 Neutral	AU$3.91B	-231.51	0.14%	1.27%	3.98%	70.79%
CIA	59 Neutral	AU$3.14B	15.71	8.25%	3.66%	0.40%	-53.09%
BSL	57 Neutral	$13.25B	160.56	0.73%	2.48%	-4.46%	-89.42%
MGX	52 Neutral	AU$578.41M	-7.14	-16.34%	―	-48.05%	-1394.34%

Sims Corporate Events

Sims Limited Amends Constitution Following Shareholder Approval

Sims Limited has announced the approval of its amended constitution by its shareholders during the 2025 Annual General Meeting. This change aligns with ASX Listing Rule 15.4.2 and reflects the company’s ongoing commitment to maintaining robust governance structures. The amendment is expected to enhance Sims Limited’s operational framework, potentially impacting its industry positioning and stakeholder relations positively.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$15.75 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 Director’s Interest

Sims Limited has announced a change in the director’s interest for Stephen Mikkelsen, as disclosed in the Appendix 3Y Change of Director’s Interest Notice. This update reflects the company’s compliance with ASX listing rules and ensures transparency in its corporate governance, which is crucial for maintaining investor confidence and regulatory adherence.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$15.75 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited’s AGM Highlights Commitment to Circular Economy Leadership

Sims Limited conducted its Annual General Meeting, where all resolutions were decided by poll. This event underscores the company’s ongoing commitment to governance and transparency, reflecting its strategic positioning in the global recycling and circular economy sectors. The outcomes of the AGM are likely to influence the company’s operational strategies and stakeholder relations, reinforcing its leadership role in sustainable practices.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$15.75 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces Cessation of Securities

Sims Limited announced the cessation of 1,897,232 securities due to the expiry of options or other convertible securities without exercise or conversion. This development may impact the company’s capital structure and could influence investor perceptions, as it reflects on the company’s financial strategies and market positioning.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$15.75 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.

Sims Limited Announces New Securities Quotation on ASX

Sims Limited has announced a new application for the quotation of securities on the Australian Securities Exchange (ASX). The announcement details the issuance of 721 ordinary fully paid securities under the ASX security code SGM, with an issue date of October 30, 2025. This move is part of Sims Limited’s ongoing efforts to manage its securities and enhance its market presence.

The most recent analyst rating on (AU:SGM) stock is a Hold with a A$16.50 price target. To see the full list of analyst forecasts on Sims stock, see the AU:SGM Stock Forecast page.