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Gerdau SA (GGB)
NYSE:GGB
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Gerdau SA
(NYSE:GGB)
74Outperform
Gerdau SA (GGB) vs. S&P 500 (SPY)
Market Cap
$5.13B
Dividend Yield5.48%
Average Volume (3M)11.53M
Price to Earnings (P/E)6.2
Beta (1Y)1.02
Revenue Growth-9.51%
EPS Growth-45.87%
CountryUS
Employees30,000
SectorBasic Materials
Sector Strength60
IndustrySteel
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,333,848,800
10 Day Avg. Volume13,717,725
30 Day Avg. Volume11,532,824
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.53
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.20Price Target Upside29.55% Upside
Rating ConsensusHold
Number of Analyst Covering2
Gerdau SA Business Overview & Revenue Model
Company DescriptionGerdau S.A. provides steel products and services. The company operates through Brazil Business, North America Business, South America Business, and Special Steel Business segments. It offers semi-finished products, including billets, blooms, and slabs; common long rolled products, such as rebars, wire rods, merchant bars, light shapes, and profiles to the construction and manufacturing industries; finished industrial products, including commercial rolled-steel bars, and light profiles and wires; agricultural products that include stakes and smooth wire products; and drawn products comprises barbed and barbless fence wires, galvanized wires, fences, concrete reinforcing wire meshes, nails, and clamps. The company also produces special steel products used in auto parts, light and heavy vehicles, and agricultural machinery, as well as the oil and gas, wind energy, machinery and equipment, mining and rail, and other markets. In addition, it offers flat products, including hot rolled coils and heavy plates; and resells flat steel products, as well as mines and produces iron ore. It sells its products through independent distributors, direct sales from the mills, and through its retail network. The company was founded in 1901 and is based in Sao Paulo, Brazil.
How the Company Makes MoneyGerdau SA generates revenue primarily through the production and sale of steel products. The company's key revenue streams include sales of long steel products to the construction and industrial sectors, which make up a significant portion of its business. Additionally, Gerdau produces specialty steel products for industries such as automotive and oil and gas, which command higher margins. The company also benefits from its recycling operations, which lower production costs and provide a source of raw materials. Strategic partnerships and joint ventures in various regions further enhance Gerdau's market presence and revenue potential, while fluctuations in global steel prices and demand also play a critical role in its earnings.
Gerdau SA Financial Statement Overview
Summary
Gerdau SA shows financial resilience with a strong balance sheet and consistent cash flow generation, despite recent profitability challenges. Revenue volatility and declining margins suggest operational pressures, but solid equity and leverage ratios provide a stable financial foundation. Continued focus on cost management and profitability improvement will be crucial to enhance future financial performance.Income Statement
Gerdau SA's revenue has shown volatility, with a recent decline from 2023 to 2024 after growth from previous years. The Gross Profit Margin in 2024 was 13.73%, a decrease from 16.44% in 2023, indicating pressure on cost management or pricing power. The absence of EBIT data for 2024 limits comprehensive profitability analysis, although the EBITDA Margin remained stable at 14.00% compared to 19.20% in 2023. Net Profit Margin also decreased to 6.81% from 10.88%, suggesting challenges in maintaining net income levels.60
Neutral
Balance Sheet
Gerdau SA's balance sheet reflects strong equity, with a Debt-to-Equity Ratio of 0.26 in 2024, down from 0.25 in 2023, indicating prudent leverage management. The Equity Ratio improved to 66.76% from 65.50%, highlighting a robust capital structure. Return on Equity decreased to 7.88% from 15.29%, pointing to reduced profitability returns to shareholders.75
Positive
Cash Flow
The company has demonstrated stable operating cash flows, with Operating Cash Flow to Net Income Ratio improving to 2.49 in 2024 from 1.48 in 2023, suggesting efficient conversion of income to cash. Free Cash Flow decreased slightly, with a Free Cash Flow to Net Income Ratio of 1.19, highlighting sustained but slightly reduced cash generation capacity.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 67.03B | 68.92B | 82.41B | 78.35B | 43.81B | Gross Profit |
| 9.20B | 11.33B | 18.75B | 20.82B | 5.93B | EBIT |
| 0.00 | 9.02B | 17.37B | 22.06B | 5.86B | EBITDA |
| 9.39B | 13.23B | 19.69B | 23.99B | 8.36B | Net Income Common Stockholders |
| 4.57B | 7.50B | 11.43B | 15.49B | 2.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.28B | 5.34B | 5.43B | 6.79B | 7.66B | Total Assets |
| 86.81B | 74.89B | 73.80B | 73.81B | 63.12B | Total Debt |
| 14.92B | 12.20B | 13.66B | 14.98B | 18.39B | Net Debt |
| 7.15B | 9.19B | 11.19B | 10.82B | 13.78B | Total Liabilities |
| 28.64B | 25.65B | 27.50B | 31.00B | 32.04B | Stockholders Equity |
| 57.95B | 49.06B | 46.12B | 42.60B | 30.86B |
| Cash Flow | Free Cash Flow | |||
| 5.43B | 5.80B | 6.67B | 9.32B | 4.60B | Operating Cash Flow |
| 11.38B | 11.14B | 11.15B | 12.52B | 6.41B | Investing Cash Flow |
| -5.03B | -5.77B | -4.46B | -3.00B | -2.23B | Financing Cash Flow |
| -2.69B | -4.13B | -8.26B | -9.98B | -2.49B |
Gerdau SA Technical Analysis
Negative
2.47
Price Trends
2.87
Negative
2.99
Negative
3.11
Negative
Market Momentum
<0.01
Positive
48.60
Neutral
25.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGB, the sentiment is Negative. The current price of 2.47 is below the 20-day moving average (MA) of 2.81, below the 50-day MA of 2.87, and below the 200-day MA of 3.11, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 48.60 is Neutral, neither overbought nor oversold. The STOCH value of 25.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GGB.
Gerdau SA Risk Analysis
Gerdau SA disclosed 40 risk factors in its most recent earnings report. Gerdau SA reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gerdau SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.13B | 6.22 | 8.98% | 5.48% | -9.51% | -45.87% | |
73 Outperform | $20.34B | 15.87 | 2.60% | 1.67% | -8.56% | 68.36% | |
73 Outperform | $18.38B | 12.46 | 17.27% | 1.60% | -6.68% | -32.96% | |
62 Neutral | $5.07B | 73.52 | -0.44% | 12.00% | 0.81% | -108.00% | |
60 Neutral | $1.88B | ― | -17.19% | 14.64% | -10.94% | -756.50% | |
57 Neutral | $10.22B | 28.88 | 3.43% | 0.49% | -13.48% | -56.94% | |
47 Neutral | $2.43B | -3.06 | -22.76% | 3.59% | 4.02% | -29.07% |
* Basic Materials Sector Average
Performance Comparison
GGB
Gerdau SA
2.47
-1.10
-30.81%
MT
ArcelorMittal
26.86
0.35
1.32%
SID
Companhia Siderúrgica Nacional
1.49
-1.05
-41.34%
STLD
Steel Dynamics
120.41
-18.40
-13.26%
TX
Ternium SA
26.52
-13.07
-33.01%
X
United States Steel
40.06
-0.55
-1.35%
Gerdau SA Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -18.21% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Positive
Gerdau demonstrated strong financial performance and strategic investments in 2024, with significant achievements in safety and shareholder returns. However, challenges remain in the Brazilian market due to high import penetration and potential demand risks. The outlook for North America is positive, although there are uncertainties related to US tariffs.Highlights
Record Low Accident Frequency Rate
Gerdau ended 2024 with the lowest accident frequency rate in its 124-year history, showcasing a strong commitment to health and safety.
Strong Financial Performance and Cash Generation
Gerdau achieved an adjusted EBITDA of BRL10.8 billion for 2024, with significant cost savings of BRL1.5 billion. The company managed to invest BRL6.2 billion in CapEx while maintaining a solid balance sheet with low leverage.
Strategic Acquisitions and Investments
Gerdau acquired two SHPs in Mato Grosso, enhancing its renewable energy production and supporting its decarbonization strategy. Additionally, the company invested in expanding its Ouro Branco unit to increase hot coil rolled strip capacity.
Positive Outlook for North America
Gerdau anticipates a positive market outlook for non-residential demand and infrastructure in North America, aided by new US trade defense measures and a recovering shipments backlog.
High Shareholder Returns
Gerdau distributed almost BRL2.9 billion in dividends and share buybacks in 2024, representing a payout of almost 66% of profit.
Lowlights
Challenging Brazilian Market Conditions
The Brazilian market was heavily impacted by a high penetration rate of imported steel, which reached almost 20% despite the implementation of a tariff-quota system.
Potential Demand Risks in Brazil
There are concerns about rising inflation and high interest rates potentially leading to lower local demand for steel in Brazil, especially in the second half of 2025.
US Tariff Uncertainties
While new US trade defense measures are expected to benefit Gerdau, there are challenges in adapting North American operations, particularly regarding tariffs on Canadian products.
Company Guidance
In the earnings call for Gerdau's fourth quarter of 2024, the company reported an adjusted EBITDA of BRL10.8 billion, influenced by strategic cost reductions, particularly in Brazil. They achieved cost savings of BRL1.5 billion, aligning with their guidance, and invested BRL6.2 billion in CapEx in 2024, with BRL6 billion planned for 2025, split between competitiveness and maintenance. Gerdau distributed BRL2.9 billion to shareholders through dividends and buybacks, with plans to repurchase 65 million shares in 2025. They also acquired two small hydroelectric power plants in Brazil, supporting their renewable energy and decarbonization strategy. For 2025, the company is transitioning to reporting results in three segments: Brazil, North America, and South America, emphasizing regional market dynamics. In Brazil, Gerdau faces challenges from high imported steel penetration and sees potential demand pressure due to inflation and interest rates. However, they are optimistic about North American prospects, buoyed by trade defense measures in the U.S. and a positive outlook for non-residential demand and infrastructure sectors.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.