Friedman Industries (FRD) AI Stock Analysis

• Market Cap: $115.99M
• Dividend Yield: 0.96%
• Average Volume (3M): 17.30K
• Price to Earnings (P/E): 20.6
• Beta (1Y): 1.09
• Revenue Growth: -12.19%
• EPS Growth: -67.95%
• Country: US
• Employees: 268
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Steel
• EPS (TTM): 0.81
• Shares Outstanding: 6,970,536
• 10 Day Avg. Volume: 22,198
• 30 Day Avg. Volume: 17,303
• PEG Ratio: 0.10
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.72
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 1.37
• Enterprise Value/Ebitda: 1.17
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 73 Outperform
• Price Target: ―

Friedman Industries demonstrates solid financial health with low leverage and improving cash flows, though there are concerns about revenue growth and net profitability. The stock benefits from strong technical momentum, indicating positive market sentiment, but faces valuation challenges with a moderate P/E ratio and limited dividend yield.

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 the sale of processed steel products. In its coil segment, the company purchases hot-rolled steel coils from steel mills and further processes them to meet customer specifications, including slitting and cutting to length. These processed coils are then sold to end-users in various industries. In the tubular segment, Friedman manufactures and sells steel pipes, which are used predominantly in the energy sector for oil and gas exploration. The company's revenue streams are significantly influenced by the demand in these sectors, as well as fluctuations in steel prices. Strategic partnerships with steel suppliers and a broad customer base across different industries also play a crucial role in sustaining its revenue model.

Friedman Industries Financial Statement Overview

Summary

Friedman Industries exhibits solid financial health with strong gross margins and low leverage, providing a stable platform. However, challenges in maintaining revenue growth and improving net profitability could impede overall performance. The company's cash flow position is improving, suggesting resilience and potential for future investment and growth.

Income Statement

The company shows strong gross profit margins of 37.46% for TTM, indicating efficient cost management. However, the net profit margin is relatively low at 1.18%, suggesting potential issues in controlling other expenses or financing costs. Revenue has slightly declined over recent periods, which could be concerning for future growth.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.02 in TTM, reflecting a low level of leverage which reduces financial risk. The equity ratio stands at 60.55%, indicating a strong capital position. However, the return on equity (ROE) is modest at 4.16%, implying that the company is not generating high returns on its invested equity.

Cash Flow

Free cash flow has improved recently, with a positive growth rate compared to previous periods. The operating cash flow to net income ratio is 2.15, suggesting strong cash generation relative to reported earnings. This indicates sound cash management, although there is room for further improvement in free cash flow relative to net income.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
447.62M	516.25M	547.54M	285.23M	126.10M	142.10M
	Gross Profit
81.66M	72.42M	43.09M	40.99M	23.59M	2.61M
	EBIT
7.19M	24.94M	21.07M	17.27M	125.09M	140.58M
	EBITDA
16.25M	29.46M	24.80M	18.59M	16.26M	-5.31M
	Net Income Common Stockholders
5.70M	17.34M	21.34M	14.07M	11.42M	-5.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07M	2.89M	2.99M	2.60M	8.19M	17.06M
	Total Assets
210.25M	230.02M	199.31M	159.28M	95.01M	77.34M
	Total Debt
35.30M	43.13M	33.22M	18.54M	1.79M	473.08K
	Net Debt
34.22M	40.24M	30.23M	15.94M	-6.40M	-16.58M
	Total Liabilities
82.92M	102.54M	83.88M	79.59M	29.67M	10.48M
	Stockholders Equity
127.33M	127.47M	115.43M	79.69M	65.34M	66.87M
Cash Flow		Free Cash Flow
7.32M	-813.00K	47.44M	-21.46M	3.82M	6.30M
	Operating Cash Flow
11.38M	4.98M	63.89M	-13.40M	8.43M	11.23M
	Investing Cash Flow
-4.27M	-5.80M	-88.19M	-7.92M	-4.59M	-4.95M
	Financing Cash Flow
-14.68M	1.34M	13.56M	17.25M	-701.91K	-889.57K

Friedman Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRD, the sentiment is Positive. The current price of 16.64 is above the 20-day moving average (MA) of 16.45, above the 50-day MA of 16.17, and above the 200-day MA of 15.49, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 57.99 is Neutral, neither overbought nor oversold. The STOCH value of 67.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRD.

Friedman Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	74 Outperform	$4.54B	7.08	19.79%	―	-15.93%	86.43%
FRD	73 Outperform	$115.99M	20.57	4.51%	0.96%	-12.19%	-67.95%
WS	66 Neutral	$1.33B	12.01	11.10%	2.43%	-6.82%	-36.02%
ZEUS	58 Neutral	$357.32M	22.28	2.95%	2.00%	-9.65%	-61.57%
ACNT	55 Neutral	$142.40M	―	-8.42%	―	-6.70%	61.17%
RDUS	53 Neutral	$834.78M	―	-41.03%	2.53%	-2.75%	-339.59%
Sector *	51 Neutral	$2.04B	-1.15	-21.24%	3.95%	2.91%	-30.44%