Education
About Us
Working with TipRanks
Follow Us
Gerdau (GGB)
:GGB
Top Page
Gerdau SA
(NYSE:GGB)
Rating:66Neutral
Price Target:
$3.00
▼(-0.66% Downside)
Gerdau SA (GGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.85B
Dividend Yield3.49%
Average Volume (3M)12.41M
Price to Earnings (P/E)10.8
Beta (1Y)0.96
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. Volume11,134,153
30 Day Avg. Volume12,409,028
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 Cap1.34
Enterprise Value/Revenue0.11
Enterprise Value/Gross Profit0.91
Enterprise Value/Ebitda0.89
Forecast
1Y Price Target
$3.40Price Target Upside12.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 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: 5.59%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While Gerdau highlighted strong performance and strategic initiatives in North America, including record low GHG emissions and significant shareholder returns, the Brazilian market faced challenges with high import penetration and operational disruptions. Despite these challenges, the company maintains a cautious optimism with strategic investments and debt management.Q2-2025 Updates
Positive Updates
Record Low GHG Emissions
Gerdau achieved an average GHG emissions of 0.85 tonnes of CO2 per tonne of steel, the lowest in its historical series and less than half the global average for the steel production sector.
Strong North American Operations
North American operations posted the highest all-time share in Gerdau's results, representing 61% of consolidated EBITDA, driven by strong demand and favorable business environment.
Debt Issuance and Leverage Management
Gerdau issued a USD 650 million bond and a BRL 1.4 billion debenture to strengthen cash flow and extend average debt maturity, maintaining a leverage ratio of 0.85x, below the company's debt policy level.
Significant Cash Returns to Shareholders
Gerdau approved dividends totaling BRL 0.12 per share and continued its 2025 share buyback program, reaching 68% completion, with a payout ratio of 90% in Q2.
Positive Outlook for North America
The demand in North America remains high, with a backlog above historical levels, driven by nonresidential construction, and capacity utilization positively impacted by steel import tariffs.
Strategic CapEx in Sustainable Mining
Invested BRL 1.6 billion in Q2, with a focus on the Miguel Burnier sustainable mining project, which is 72% complete and expected to add 5.5 million tonnes of high-quality iron ore.
Negative Updates
Challenges in Brazilian Market
Brazil's domestic market is impacted by excessive steel imports, with an import penetration rate of 23.4%, leading to reduced investments and production capacity adjustments by Gerdau.
Reduced Operations in Brazil
Gerdau saw a reduction in its Brazilian operations, with adverse impacts on financial performance due to high import penetration and lack of effective trade defense measures.
Concerns over Rising Gross Debt
Gerdau's gross debt increased from BRL 5 billion to BRL 9 billion over recent quarters, raising concerns despite maintaining a low leverage ratio.
One-Off Costs at Ouro Branco Mill
Operational disruptions at the Ouro Branco mill due to ongoing projects led to increased costs and reduced production capacity, impacting Q2 results.
Company Guidance
During Gerdau's second quarter 2025 earnings call, CEO Gustavo Werneck and CFO Rafael Japur provided detailed guidance on the company's performance and strategic direction. The North American operations were a focal point, with the segment contributing 61% to consolidated EBITDA, showcasing a strong recovery and favorable market conditions. Financially, Gerdau reported an adjusted EBITDA of BRL 2.6 billion, up 6.6% from the first quarter, and a net income of BRL 864 million, reflecting a 14% increase. The company maintained a low leverage ratio of 0.85x net debt over EBITDA, despite a net debt increase to BRL 9 billion, emphasizing its ability to continue investments despite a challenging Brazilian market. Gerdau announced a CapEx of BRL 1.6 billion for the quarter, with significant investment in the Miguel Burnier mining project, which is 72% complete and expected to add BRL 1.1 billion in annual EBITDA. The company also highlighted its commitment to sustainability, achieving an average GHG emissions rate of 0.85 tonnes of CO2 per tonne of steel, significantly below the global average. Looking forward, Gerdau plans to reduce investments in Brazil due to excessive steel imports but will maintain investment levels in North America, reflecting a strategic shift towards markets with higher returns and stability.Gerdau SA Financial Statement Overview
Summary
Gerdau SA demonstrates strong profitability with healthy margins and a stable balance sheet. Despite challenges in sustaining revenue growth, the company maintains robust financial health in the steel industry.Income Statement
Gerdau SA shows strong gross and net profit margins with a recent decline in revenue growth. The TTM gross profit margin stands at 12.8% and the net profit margin at 4.8%. EBIT and EBITDA margins are healthy at 8.8% and 12.3%, respectively. Despite revenue growth challenges, profitability remains robust.75
Positive
Balance Sheet
The company's balance sheet is stable with a debt-to-equity ratio of 0.29, indicating manageable leverage. The return on equity is 5.8%, reflecting moderate profitability relative to equity. The equity ratio of 65.5% suggests strong equity backing against total assets, enhancing financial stability.78
Positive
Cash Flow
Operating cash flow remains strong, though free cash flow growth has recently declined. The operating cash flow to net income ratio is impressive at 3.3, indicating efficient cash conversion. However, the free cash flow to net income ratio at 1.3 points to potential challenges in maintaining growth.70
Positive
| 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
3.02
Price Trends
2.97
Positive
2.82
Positive
2.93
Positive
Market Momentum
<0.01
Negative
54.48
Neutral
72.19
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 3.02 is above the 20-day moving average (MA) of 2.97, above the 50-day MA of 2.97, and above the 200-day MA of 2.93, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 54.48 is Neutral, neither overbought nor oversold. The STOCH value of 72.19 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 (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $18.49B | 18.32 | 11.57% | 1.53% | -5.51% | -45.07% | |
70 Neutral | $6.35B | 10.85 | 4.89% | 8.35% | -16.83% | ― | |
69 Neutral | $27.48B | 10.14 | 4.72% | 1.45% | -4.36% | ― | |
66 Neutral | $5.85B | 10.77 | 5.77% | 3.49% | -6.55% | -37.93% | |
64 Neutral | $12.42B | 186.15 | 0.86% | 0.36% | -14.79% | -88.78% | |
56 Neutral | £2.53B | 6.23 | -0.23% | 47.30% | 10.04% | 4.58% | |
47 Neutral | $1.76B | ― | -15.57% | 16.04% | -10.77% | -191.87% |
* Basic Materials Sector Average
Performance Comparison
GGB
Gerdau SA
3.02
-0.06
-1.95%
MT
ArcelorMittal
33.36
11.84
55.02%
SID
Companhia Siderúrgica Nacional
1.43
-0.63
-30.58%
STLD
Steel Dynamics
125.60
12.33
10.89%
TX
Ternium SA
32.34
0.78
2.47%
X
United States Steel
54.84
12.72
30.20%
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.