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Gerdau SA (GGB)
NYSE:GGB
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Gerdau SA
(NYSE:GGB)
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Rating:71Outperform
Price Target:
$3.50
▲(12.54% Upside)
Gerdau SA's overall stock score reflects a solid financial foundation with some challenges in growth and profitability. The strong performance in North America and attractive valuation are significant positives, while the Brazilian market challenges and increased net debt are concerns.
Gerdau SA (GGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.11B
Dividend Yield3.44%
Average Volume (3M)10.91M
Price to Earnings (P/E)11.1
Beta (1Y)0.93
Revenue Growth-6.55%
EPS Growth-37.93%
CountryUS
Employees30,000
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.08
Shares Outstanding1,295,747,300
10 Day Avg. Volume14,802,698
30 Day Avg. Volume10,910,988
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)0.64
Price to Sales (P/S)0.56
P/FCF Ratio6.87
Enterprise Value/Market Cap1.28
Enterprise Value/Revenue0.11
Enterprise Value/Gross Profit0.91
Enterprise Value/Ebitda0.89
Forecast
1Y Price Target
$3.50Price Target Upside12.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Gerdau SA Business Overview & Revenue Model
Company DescriptionGerdau SA (GGB) is a leading global steel manufacturer based in Brazil, primarily engaged in the production and processing of long steel products, flat steel products, and special steel products. The company serves various sectors, including construction, automotive, energy, and manufacturing, and operates in multiple countries across the Americas and other regions. Gerdau's core offerings include rebar, wire rod, merchant bars, and flat steel products, which are essential for infrastructure development and industrial applications.
How the Company Makes MoneyGerdau generates revenue primarily through the sale of its steel products, which are sold to various industries, including construction, automotive, and manufacturing. The company has a diversified revenue model, with significant contributions from long steel products, flat steel products, and special steel segments. Key revenue streams include the sale of rebar, wire rod, and merchant bars, as well as flat rolled products used in various applications. Additionally, Gerdau benefits from strategic partnerships and collaborations with major industrial players and construction firms, which enhance its market reach and product demand. The company also engages in recycling operations, producing steel from scrap metal, which not only provides a cost-effective raw material source but also aligns with sustainability goals, adding to its profitability.
Gerdau SA Earnings Call Summary
Earnings Call Date:Aug 01, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Gerdau's earnings call reflected strong performance in North America and significant progress in sustainability and shareholder returns. However, challenges in the Brazilian market due to high import penetration and increased net debt slightly offset the positive aspects.Q2-2025 Updates
Positive Updates
Record Low GHG Emissions
Gerdau reported an average greenhouse gas emissions of 0.85 tonnes of CO2 per tonne of steel, the lowest in its historical series and less than half of the global average for the steel production sector.
North American Operations Performance
The North American operations posted the highest all-time share in results, representing 61% of consolidated EBITDA due to a strong recovery and favorable market conditions.
Adjusted EBITDA and Net Income Growth
Adjusted EBITDA was BRL 2.6 billion, 6.6% higher than the first quarter of 2025. Net income stood at BRL 864 million, up 14% compared to the previous quarter.
Successful Debt Issuance
Gerdau issued a USD 650 million bond maturing in 2035 and a 7-year debenture totaling BRL 1.4 billion, aimed at strengthening the cash flow and extending the average maturity of the company's debt.
Shareholder Returns
The company approved a dividend distribution of BRL 0.12 per share and continued its 2025 share buyback program, achieving a payout ratio of 90% in the second quarter.
Miguel Burnier Sustainable Mining Project
The project reached 72% completion and is expected to generate about BRL 1.1 billion a year once the ramp-up is finalized.
Negative Updates
Challenges in Brazilian Market
The Brazilian domestic market continued to be impacted by excessive imports, with an import penetration rate of 23.4%, leading to reduced investments in Brazil.
Increased Net Debt
Net debt increased from BRL 5 billion at the end of the previous year to BRL 9 billion in Q2, driven by shareholder returns and a significant CapEx program.
Operational Challenges at Ouro Branco
Production pace at Ouro Branco was affected by several interventions, leading to a nonrecurring impact on costs.
Company Guidance
During Gerdau's second-quarter 2025 results presentation, the company outlined several key metrics and guidance for upcoming periods. The North American operations were highlighted for their strong performance, contributing 61% of the consolidated EBITDA, marking a record share. Gerdau's adjusted EBITDA was BRL 2.6 billion, a 6.6% increase from the first quarter. The company also reported a net income of BRL 864 million, or BRL 0.43 per share, a 14% rise compared to the previous quarter. The leverage ratio stood at 0.85x net debt over EBITDA. Investment-wise, Gerdau allocated BRL 1.6 billion in capex during the quarter, primarily towards the Miguel Burnier sustainable mining project, which is 72% complete and expected to add 5.5 million tonnes of high-quality iron ore. Additionally, the company issued a USD 650 million bond and a 7-year debenture totaling BRL 1.4 billion to strengthen cash flow. For shareholder returns, Gerdau announced dividends of BRL 0.12 per share and continued its share buyback program, reaching 68% completion. The company plans to reduce future investments in Brazil due to challenges in the domestic market but will maintain its investment focus in North America.Gerdau SA Financial Statement Overview
Summary
Gerdau SA shows a stable financial position with some concerns. The income statement indicates pressures on profitability and growth, while the balance sheet is robust with controlled leverage. Cash flow management needs improvement, particularly in free cash flow generation.Income Statement
Gerdau SA's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin and net profit margin have decreased compared to previous years, indicating pressure on profitability. Revenue growth has been inconsistent, with a slight increase in the TTM period following a decline in the previous year. The EBIT and EBITDA margins have also contracted, reflecting challenges in maintaining operational efficiency.65
Positive
Balance Sheet
The balance sheet remains relatively strong with a manageable debt-to-equity ratio, indicating prudent financial leverage. However, the return on equity has decreased over the years, suggesting reduced efficiency in generating profits from shareholders' equity. The equity ratio remains stable, highlighting a solid capital structure.72
Positive
Cash Flow
Cash flow analysis reveals a decline in free cash flow growth, which could impact future investments and debt repayments. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased, pointing to potential challenges in maintaining cash reserves.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 69.10B | 67.03B | 68.92B | 82.41B | 78.35B | 43.81B |
| Gross Profit | 8.57B | 9.20B | 11.33B | 18.75B | 20.82B | 5.93B |
| EBITDA | 8.84B | 9.39B | 13.23B | 19.69B | 23.99B | 8.36B |
| Net Income | 3.27B | 4.57B | 7.50B | 11.43B | 15.49B | 2.37B |
Balance Sheet | ||||||
| Total Assets | 86.85B | 86.81B | 74.89B | 73.80B | 73.81B | 63.12B |
| Cash, Cash Equivalents and Short-Term Investments | 8.97B | 8.28B | 5.34B | 5.43B | 6.79B | 7.66B |
| Total Debt | 19.52B | 14.92B | 12.20B | 13.66B | 14.98B | 18.39B |
| Total Liabilities | 31.73B | 28.64B | 25.65B | 27.50B | 31.00B | 32.04B |
| Stockholders Equity | 54.92B | 57.95B | 49.06B | 46.12B | 42.60B | 30.86B |
Cash Flow | ||||||
| Free Cash Flow | 3.35B | 5.43B | 5.80B | 6.67B | 9.32B | 4.60B |
| Operating Cash Flow | 10.53B | 11.38B | 11.14B | 11.15B | 12.52B | 6.41B |
| Investing Cash Flow | -8.44B | -5.03B | -5.77B | -4.46B | -3.00B | -2.23B |
| Financing Cash Flow | 1.51B | -2.69B | -4.13B | -8.26B | -9.98B | -2.49B |
Gerdau SA Technical Analysis
Positive
3.11
Price Trends
3.01
Positive
2.93
Positive
2.89
Positive
Market Momentum
0.03
Positive
53.41
Neutral
49.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGB, the sentiment is Positive. The current price of 3.11 is above the 20-day moving average (MA) of 3.10, above the 50-day MA of 3.01, and above the 200-day MA of 2.89, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 53.41 is Neutral, neither overbought nor oversold. The STOCH value of 49.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | 20.07B | 19.94 | 11.74% | 1.41% | -5.51% | -45.07% | |
71 Outperform | $6.11B | 11.05 | 5.77% | 3.44% | -6.55% | -37.93% | |
70 Neutral | 6.76B | 11.45 | -0.45% | 7.84% | -16.83% | ― | |
63 Neutral | 29.48B | 10.93 | 4.59% | 1.35% | -4.51% | ― | |
50 Neutral | 1.99B | -5.13 | -15.90% | 15.00% | -10.77% | -191.87% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
Performance Comparison
GGB
Gerdau SA
3.06
-0.31
-9.20%
CLF
Cleveland-Cliffs
12.07
-0.69
-5.41%
CMC
Commercial Metals Company
57.04
2.82
5.20%
SIM
Grupo Simec SA De CV
27.86
0.26
0.94%
SID
Companhia Siderúrgica Nacional
1.51
-0.83
-35.47%
TX
Ternium SA
34.71
0.86
2.54%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.