Friedman Industries (FRD) AI Stock Analysis

• Market Cap: $122.61M
• Dividend Yield: 0.75%
• Average Volume (3M): 22.76K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.72
• 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: 1.77
• Enterprise Value/Revenue: 0.37
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: 8.27
• 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: $18.50 ▼(-4.64% Downside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

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

Very low TTM debt-to-equity provides durable financial flexibility: it reduces interest burden, supports sourcing working capital in cyclical downturns, and preserves borrowing capacity for opportunistic investment or to cover cash-flow swings over the next 2–6 months.

Revenue rebound

A meaningful TTM revenue rebound signals improving demand or execution that can persist beyond a single quarter. Sustained top-line growth improves capacity utilization and the opportunity to restore margins and convert sales into durable cash flow if maintained across the business cycle.

Expanded committed credit facility

Incremental committed borrowing capacity materially improves short-to-medium term liquidity. That structural increase reduces refinancing risk, supports working-capital needs during inventory swings, and gives management flexibility to smooth operations or fund targeted investments over several months.

Negative Factors

Weak cash generation

Persistent negative operating and free cash flow is a durable concern: it limits the firm's ability to self-fund capex, repay or reduce leverage, and sustain distributions. Ongoing cash burn increases reliance on credit and heightens vulnerability to funding or working-capital stress.

Compressed profitability margins

Material margin compression reduces the earnings cushion against input-cost shocks and cyclical demand declines. Lower gross and net margins indicate thinner pricing power or adverse mix, which can erode long-term returns and make cash generation more sensitive to modest revenue volatility.

High cyclicality and input-price sensitivity

The core business of buying and converting steel means earnings and working capital are structurally exposed to commodity price swings and volume cycles. This persistent exposure makes revenue, margins, and cash flow harder to predict and increases the likelihood of recurring volatility over 2–6 months.

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 makes money primarily by buying steel and converting it into higher-value products and services sold to customers. Its key revenue streams generally come from: (1) Coil products: the company purchases steel coil and generates revenue by processing it (e.g., slitting coils into narrower widths and cutting-to-length into sheets/plate) and selling the processed steel to customers. Revenue in this segment is driven by shipment volumes, the spread between selling prices and input steel costs, and fees/embedded margin for processing services. (2) Tubular products: the company manufactures (and/or further processes) steel pipe and tube products and sells them to customers, with revenue influenced by demand in end markets such as construction and industrial applications, product mix, and the margin between selling prices and steel input and conversion costs. Across both segments, profitability is sensitive to steel price movements, inventory costs, operating utilization, and customer demand cycles; specific major partnerships or customer concentration details are null.

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	97.13M	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 above the 20-day moving average (MA) of 18.22, above the 50-day MA of 19.17, and above the 200-day MA of 18.99, indicating a bearish trend. The MACD of -0.59 indicates Positive momentum. The RSI at 35.56 is Neutral, neither overbought nor oversold. The STOCH value of 16.69 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	$420.63M	40.46	29.57%	19.32%	-78.78%	-81.27%
FRD	67 Neutral	$122.61M	11.73	8.47%	0.75%	8.72%	43.14%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
HUDI	48 Neutral	$18.16M	-13.91	-1.85%	―	-20.24%	-119.83%
ACNT	46 Neutral	$120.65M	-37.69	1.01%	―	-29.03%	―