Vulcan Steel Ltd. (VSL) AI Stock Analysis

• Market Cap: AU$840.79M
• Dividend Yield: 2.14%
• Average Volume (3M): 49.69K
• Price to Earnings (P/E): 39.6
• Beta (1Y): 0.90
• Revenue Growth: -15.83%
• EPS Growth: -61.60%
• Country: AU
• Employees: 1,307
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Steel
• EPS (TTM): 0.16
• Shares Outstanding: 131,785,390
• 10 Day Avg. Volume: 62,138
• 30 Day Avg. Volume: 49,685
• PEG Ratio: -0.34
• Price to Book (P/B): 6.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.46
• 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$7.25
• Price Target Upside: 13.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 55 Neutral
• Price Target: AU$6.50 ▲(1.88%Upside)

The overall stock score for Vulcan Steel Ltd. is influenced primarily by its financial performance and technical analysis. The company's strong cash flow is a positive factor, but declining revenue and profitability margins, along with significant technical weaknesses, weigh heavily on the score. The high P/E ratio indicates valuation concerns, further impacting the overall assessment.

Vulcan Steel Ltd. Business Overview & Revenue Model

Company Description

Vulcan Steel Limited, together with its subsidiaries, engages in the sale and distribution of steel and metal products in New Zealand and Australia. The company operates in two segments, Steel and Metals. It sells hollows; merchant products, including bars, beams, angles, channels, and unprocessed coils and plates; stainless steel products, such as hollows, bars, fittings, and sheets; and high-performance steel and metal products. The company also provides cutting, drilling, tapping, countersinking, and folding of plates, as well as sheeting and slitting services. Vulcan Steel Limited was incorporated in 1995 and is based in Auckland, New Zealand.

How the Company Makes Money

Vulcan Steel Ltd. generates revenue primarily through the sale of its steel products to businesses across multiple sectors. The company's key revenue streams include direct sales of standard steel products such as sheets and coils, as well as custom solutions tailored to specific client requirements. Additionally, VSL engages in long-term contracts and partnerships with major players in industries like construction and manufacturing, ensuring a steady flow of income. The company also invests in research and development to enhance product quality and operational efficiency, which helps maintain competitive pricing and attract more business.

Vulcan Steel Ltd. Financial Statement Overview

Summary

Vulcan Steel Ltd. faces challenges with declining revenue and profitability margins, impacting its income statement. The balance sheet shows increased leverage, posing potential financial risks. However, strong cash flows provide a buffer against operational pressures and support financial stability.

Income Statement

Vulcan Steel Ltd. has shown a decline in total revenue from $1.24 billion in 2023 to $1.06 billion in 2024, representing a negative revenue growth rate. The gross profit margin decreased from 35.65% in 2023 to 35.24% in 2024. The net profit margin also saw a decline from 7.06% to 3.76% over the same period. These figures suggest pressure on profitability, although the company maintains positive EBIT and EBITDA margins. The industry may face challenges, but steady EBIT and EBITDA indicate some operational efficiency.

Balance Sheet

The debt-to-equity ratio increased, indicating higher leverage with a rise from 3.49 in 2023 to 3.43 in 2024. Stockholders' equity decreased, which might pose a risk if the trend continues. The equity ratio slightly decreased from 18.52% to 18.98%, highlighting increased reliance on debt financing. The return on equity dropped significantly to 23.24% from 47.28%, further emphasizing the impact of reduced net income on shareholder returns.

Cash Flow

The operating cash flow increased from $146.77 million in 2023 to $168.71 million in 2024, demonstrating strong cash generation capability. The free cash flow also improved, reflecting effective management of capital expenditures and investments. The free cash flow to net income ratio is favorable, indicating good conversion of earnings into cash. These metrics suggest a stable cash flow position, which is vital for sustaining operations and supporting debt obligations.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
993.31M	1.06B	1.24B	968.40M	731.46M	649.83M
	Gross Profit
348.63M	374.95M	443.89M	387.08M	152.89M	106.83M
	EBIT
71.86M	98.99M	147.12M	184.77M	99.60M	54.58M
	EBITDA
90.25M	163.02M	207.40M	232.75M	129.49M	85.09M
	Net Income Common Stockholders
23.06M	39.98M	87.90M	123.98M	61.10M	32.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.96M	24.11M	20.32M	23.93M	10.17M	14.20M
	Total Assets
877.14M	906.43M	1.00B	791.89M	580.78M	556.32M
	Total Debt
537.07M	590.21M	649.73M	411.44M	323.80M	294.91M
	Net Debt
528.10M	566.10M	629.41M	387.51M	313.63M	280.72M
	Total Liabilities
707.90M	734.38M	818.29M	607.44M	494.92M	421.35M
	Stockholders Equity
169.24M	172.06M	185.92M	184.45M	85.86M	134.97M
Cash Flow		Free Cash Flow
117.71M	142.02M	123.82M	-62.73K	99.79M	66.31M
	Operating Cash Flow
144.09M	168.71M	146.77M	12.09M	105.45M	71.27M
	Investing Cash Flow
-25.91M	-23.98M	-193.24M	-11.54M	-822.00K	-32.21M
	Financing Cash Flow
-113.33M	-141.18M	43.16M	12.38M	-108.70M	-29.74M

Vulcan Steel Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:VSL, the sentiment is Negative. The current price of 6.38 is below the 20-day moving average (MA) of 6.72, below the 50-day MA of 7.14, and below the 200-day MA of 7.36, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 36.31 is Neutral, neither overbought nor oversold. The STOCH value of 17.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:VSL.

Vulcan Steel Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSL	55 Neutral	AU$840.79M	39.60	13.66%	2.14%	-15.83%	-61.60%
Sector *	51 Neutral	$2.04B	-1.15	-21.24%	3.95%	2.91%	-30.44%
JHIUF		$11.42B	26.55	21.09%	―	―	―
OCLDF		$6.06B	69.41	2.30%	3.34%	―	―
3NR		€724.45M	10.59	18.01%	5.98%	―	―
AMC	68 Neutral	AU$32.81B	16.56	20.24%	5.64%	-1.42%	25.16%

Vulcan Steel Ltd. Corporate Events

Vulcan Steel Director Increases Shareholding

Vulcan Steel Limited announced a change in the director’s interest, with Russell Chenu acquiring an additional 8,000 ordinary shares through on-market trades. This acquisition increases his total holdings to 63,896 shares, indicating a strengthened personal investment in the company, which may reflect confidence in its future performance.