Friedman Industries (FRD) AI Stock Analysis

• Market Cap: $132.14M
• Dividend Yield: 0.75%
• Average Volume (3M): 22.76K
• Price to Earnings (P/E): 8.4
• Beta (1Y): 0.73
• Revenue Growth: 8.72%
• EPS Growth: 43.14%
• Country: US
• Employees: 268
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.43
• Shares Outstanding: 7,112,182
• 10 Day Avg. Volume: 15,212
• 30 Day Avg. Volume: 22,764
• PEG Ratio: -0.27
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.23
• P/FCF Ratio: -10.99
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 2.59
• Enterprise Value/Ebitda: 4.95
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $23.00 ▲(18.56% Upside)

The score is driven mainly by mixed financial performance: strong balance-sheet conservatism and improving TTM revenue are offset by compressed margins and negative operating/free cash flow. Technicals are moderately supportive (positive MACD and price above key moving averages), while valuation is reasonable (low P/E) but the dividend yield is modest. The credit facility expansion adds incremental flexibility.

Positive Factors

Conservative balance sheet

Extremely low TTM leverage (~0.03 debt/equity) provides durable financial flexibility: it lowers interest burden, supports capital allocation through steel cycles, enables covenant room for working-capital swings, and preserves ability to invest or weather downturns without forced asset sales.

Revenue rebound

A 14.5% TTM revenue rebound indicates recovering end-market demand and better utilization of production capacity. Sustained top-line momentum helps absorb fixed costs, supports scale-driven operational improvements, and underpins longer-term recovery of profitability if maintained.

Expanded credit commitments

The $15M increase in committed credit expands liquidity and operating flexibility, reducing short-term refinance risk and providing a buffer for cyclical working-capital needs or targeted capex. Structurally this improves funding optionality for strategy execution over months.

Negative Factors

Weak cash generation

Persistent negative operating and materially negative free cash flow constrain the firm's ability to self-fund investments, pay down liabilities, or sustainably support dividends. Over a multi-month horizon, cash burn raises reliance on credit lines and increases refinancing and liquidity risk.

Compressed margins

Thin gross and net margins reduce resilience to raw-material or freight cost shocks and limit incremental cash generation per dollar of revenue. Sustained margin compression constrains profitability, ROE expansion, and reinvestment capacity even if revenues grow.

Cyclical industry volatility

Steel's cyclicality drives lumpy revenue and profit swings, complicating capacity planning and working-capital management. Over the medium term this increases earnings unpredictability, pressuring margins and requiring conservative liquidity and capital decisions to avoid stress during downturns.

Friedman Industries Business Overview & Revenue Model

Company Description

Friedman Industries, Incorporated engages in steel processing, pipe manufacturing and processing, and the steel and pipe distribution businesses the United States. It operates in two segments, Coil and Tubular. The Coil segment is involved in the conversion of steel coils into flat sheet and plate steel cut to customer specifications and reselling steel coils. This segment also processes customer-owned coils on a fee basis. The company sells coil products and processing services to approximately 230 customers located primarily in the midwestern, southwestern and southeastern regions of the United States. Its principal customers for these products and services are steel distributors and customers manufacturing steel products, such as steel buildings, railroad cars, barges, tanks and containers, trailers, component parts and other fabricated steel products. The Tubular segment manufactures line and oil country pipes, as well as pipes for structural applications. This segment sells its tubular products principally to steel and pipe distributors through its own sales force. Friedman Industries, Incorporated was incorporated in 1965 and is headquartered in Longview, Texas.

How the Company Makes Money

Friedman Industries generates revenue through multiple key streams, primarily by selling steel products to industrial customers and distributors. The company sources raw materials, processes them into finished steel products, and then sells these products at competitive prices. Revenue is further enhanced through value-added services such as custom processing, cutting, and coating. Additionally, Friedman Industries may benefit from fluctuations in steel prices, which can positively impact profit margins. Strategic partnerships with suppliers and customers also play a crucial role in securing steady demand and fostering long-term contracts, contributing to consistent revenue generation.

Friedman Industries Financial Statement Overview

Summary

Financials are mixed: TTM revenue rebounded (+14.5%) and the balance sheet is very conservative (TTM debt-to-equity ~0.03), but profitability has compressed (gross margin ~6.7%, net margin ~2.8%) and cash generation is a key weakness with slightly negative operating cash flow and materially negative free cash flow.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded strongly (+14.5%), but profitability is thinner than prior years: gross margin fell to ~6.7% and net margin to ~2.8% versus healthier levels in 2022–2024. Annual results show meaningful volatility (2025 annual revenue down and profits compressed vs 2024), consistent with a cyclical steel environment—good top-line momentum recently, but weaker pricing/mix and less stable earnings power.

Balance Sheet

Leverage is very conservative in TTM (debt-to-equity ~0.03) and equity is sizable relative to the asset base, indicating strong balance-sheet flexibility. While debt was higher in recent annual periods (debt-to-equity ~0.30–0.38 in 2023–2025 annual), the overall profile still looks manageable, and returns on equity have been solid across the cycle (TTM ~12%, peaking much higher in 2022–2024).

Cash Flow

Cash generation is the weak spot: TTM operating cash flow is slightly negative and free cash flow is materially negative, following negative free cash flow in 2024 and 2025 annual periods. While 2023 showed very strong cash inflows (positive operating and free cash flow), the recent swing back to cash burn suggests working-capital/capex pressures and reduces near-term financial flexibility despite reported profits.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	584.35M	444.60M	516.25M	547.54M	285.24M	126.10M
Gross Profit	50.00M	45.48M	72.42M	69.98M	40.99M	23.59M
EBITDA	26.21M	13.94M	29.46M	32.93M	29.84M	16.76M
Net Income	15.63M	6.08M	17.34M	21.34M	14.07M	11.42M
Balance Sheet
Total Assets	311.86M	226.82M	230.02M	199.31M	159.28M	95.01M
Cash, Cash Equivalents and Short-Term Investments	3.00M	3.69M	2.89M	2.99M	2.60M	8.19M
Total Debt	4.28M	50.48M	43.13M	34.45M	18.82M	2.06M
Total Liabilities	169.65M	94.40M	102.54M	83.88M	79.59M	29.67M
Stockholders Equity	142.21M	132.43M	127.47M	115.43M	79.69M	65.34M
Cash Flow
Free Cash Flow	-7.45M	-9.41M	-813.00K	47.44M	-21.46M	3.82M
Operating Cash Flow	-658.00K	-4.41M	4.98M	63.89M	-13.40M	8.43M
Investing Cash Flow	-51.63M	-3.43M	-5.80M	-88.19M	-7.92M	-4.59M
Financing Cash Flow	54.57M	6.09M	1.34M	13.56M	17.25M	-701.91K

Friedman Industries Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.40
• 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 FRD, the sentiment is Negative. The current price of 19.4 is below the 20-day moving average (MA) of 19.69, below the 50-day MA of 19.96, and above the 200-day MA of 18.81, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 37.44 is Neutral, neither overbought nor oversold. The STOCH value of 4.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRD.

Friedman Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSB	69 Neutral	$436.37M	25.36	29.57%	19.32%	-78.78%	-81.27%
FRD	67 Neutral	$132.14M	8.36	8.47%	0.75%	8.72%	43.14%
ACNT	64 Neutral	$165.29M	186.64	-3.84%	―	-29.03%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
HUDI	46 Neutral	$16.73M	-13.11	-0.69%	―	-20.24%	-119.83%

Friedman Industries Corporate Events

Friedman Industries Enhances Credit Agreement with Sixth Amendment

On December 9, 2025, Friedman Industries entered into a Sixth Amendment to its Amended and Restated Credit Agreement, involving Century Metals & Supplies, LLC, and JPMorgan Chase Bank, N.A. This amendment increases the aggregate commitments from $125 million to $140 million, adjusts threshold amounts, and modifies the definition of ‘Eligible Accounts’, potentially enhancing the company’s financial flexibility and operational capacity.

The most recent analyst rating on (FRD) stock is a Hold with a $21.00 price target. To see the full list of analyst forecasts on Friedman Industries stock, see the FRD Stock Forecast page.