Gerdau SA (GGB) AI Stock Analysis

• Market Cap: $6.70B
• Dividend Yield: 3.05%
• Average Volume (3M): 17.96M
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.92
• Revenue Growth: -2.53%
• EPS Growth: -36.08%
• Country: US
• Employees: 30,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.10
• Shares Outstanding: 1,283,097,300
• 10 Day Avg. Volume: 12,873,850
• 30 Day Avg. Volume: 17,959,255
• PEG Ratio: -0.21
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 6.87
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: 1.00
• Enterprise Value/Ebitda: 0.93
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $3.50 ▲(3.86% Upside)

Gerdau SA's overall stock score reflects strong North American operations and positive earnings call highlights, including EBITDA and net income growth. Technical indicators show a positive trend, and valuation metrics are reasonable. However, financial performance concerns, particularly in cash flow and profitability, and challenges in the Brazilian market weigh on the score.

Positive Factors

North American Operations

Strong performance in North America indicates robust market presence and operational efficiency, contributing significantly to overall profitability.

Sustainability Efforts

Record low emissions demonstrate Gerdau's commitment to sustainability, potentially enhancing its reputation and compliance with global environmental standards.

Debt Management

Successful debt issuance extends debt maturity and strengthens cash flow, providing financial stability and flexibility for future investments.

Negative Factors

Challenges in Brazilian Market

High import penetration in Brazil poses a challenge, potentially affecting Gerdau's domestic market share and profitability.

Increased Net Debt

Rising net debt levels could strain financial resources, impacting Gerdau's ability to invest in growth opportunities and manage operational costs.

Operational Challenges

Operational disruptions at Ouro Branco can lead to increased costs and inefficiencies, affecting overall production output and profitability.

Gerdau SA Business Overview & Revenue Model

Company Description

Gerdau SA (GGB) is a leading Brazilian steel manufacturer and one of the largest in the Americas, with operations spanning several countries. The company specializes in producing long steel products, flat steel products, and special steel, catering primarily to the construction, automotive, and industrial sectors. Gerdau operates numerous steel mills and service centers, focusing on sustainability and innovation to enhance its production processes and product offerings.

How the Company Makes Money

Gerdau generates revenue primarily through the sale of steel products, including reinforcing bars, wire rods, and flat steel. The company benefits from a diverse portfolio that addresses various market segments, such as construction, automotive, and manufacturing. Key revenue streams include domestic sales in Brazil as well as exports to international markets. Additionally, Gerdau has established strategic partnerships with construction firms and automotive manufacturers to secure long-term contracts, which provide stable income. The company also invests in recycling operations, which not only bolster its sustainability initiatives but also lower production costs, thereby enhancing profit margins. Economic cycles, infrastructure projects, and demand for steel in various industries significantly influence Gerdau's earnings.

Gerdau SA Financial Statement Overview

Summary

Gerdau SA's financial performance shows operational efficiency through positive EBIT and EBITDA margins. However, declining profitability, volatile revenue growth, and cash flow challenges pose concerns. The balance sheet is stable, but declining ROE indicates difficulties in maximizing shareholder value.

Income Statement

Gerdau SA's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in gross profit margin and net profit margin compared to previous years, reflecting pressure on profitability. Revenue growth has been volatile, with a significant drop in the most recent period. However, the company maintains a positive EBIT and EBITDA margin, suggesting operational efficiency. Overall, while there are strengths in operational margins, declining profitability and revenue growth pose concerns.

Balance Sheet

The balance sheet of Gerdau SA is relatively strong, with a moderate debt-to-equity ratio indicating manageable leverage. The equity ratio is healthy, and the company has maintained a positive return on equity, although it has decreased over the years. The company's financial stability is supported by a solid equity base, but the declining ROE suggests challenges in generating returns on equity.

Cash Flow

Gerdau SA's cash flow statement reveals some challenges. The free cash flow growth rate has been negative, indicating potential issues in generating cash. The operating cash flow to net income ratio is below 1 in the TTM, suggesting that cash generation from operations is not fully covering net income. The free cash flow to net income ratio has also declined, pointing to reduced cash efficiency. These factors highlight potential liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	69.71B	67.03B	68.92B	82.41B	78.35B	43.81B
Gross Profit	8.14B	9.20B	11.33B	18.75B	20.82B	5.93B
EBITDA	8.76B	9.39B	13.23B	19.69B	23.99B	8.36B
Net Income	3.00B	4.57B	7.50B	11.43B	15.49B	2.37B
Balance Sheet
Total Assets	87.26B	86.81B	74.89B	73.80B	73.81B	63.12B
Cash, Cash Equivalents and Short-Term Investments	9.87B	8.28B	5.34B	5.43B	6.79B	7.66B
Total Debt	19.99B	14.92B	12.17B	13.66B	14.98B	18.39B
Total Liabilities	32.52B	28.64B	25.65B	27.50B	31.00B	32.04B
Stockholders Equity	54.54B	57.95B	49.06B	46.12B	42.60B	30.86B
Cash Flow
Free Cash Flow	379.92M	5.43B	5.80B	6.67B	9.32B	4.60B
Operating Cash Flow	7.63B	11.38B	11.14B	11.15B	12.52B	6.41B
Investing Cash Flow	-8.46B	-5.03B	-5.77B	-4.46B	-3.00B	-2.23B
Financing Cash Flow	2.24B	-2.69B	-4.13B	-8.26B	-9.98B	-2.49B

Gerdau SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 3.37 is below the 20-day moving average (MA) of 3.49, above the 50-day MA of 3.32, and above the 200-day MA of 2.94, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 62.12 is Neutral, neither overbought nor oversold. The STOCH value of 58.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GGB.

Gerdau SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	73 Outperform	$4.62B	23.68	5.84%	―	-16.81%	-67.68%
TX	73 Outperform	$7.18B	12.50	4.80%	7.39%	-16.69%	585.38%
GGB	71 Outperform	$6.70B	13.59	5.21%	3.05%	-2.53%	-36.08%
CMC	70 Neutral	$7.09B	86.08	1.99%	1.13%	-1.61%	-81.36%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
SID	54 Neutral	$2.23B	-5.50	-10.50%	14.25%	-5.79%	-5.30%
CLF	53 Neutral	$7.20B	―	-27.16%	―	-6.76%	-255.94%

Gerdau SA Corporate Events

Gerdau S.A. Cancels Shares to Optimize Capital Structure

On October 30, 2025, Gerdau S.A. announced the cancellation of 283,900 common shares and 12,650,000 preferred shares, which will not affect the capital stock value. This adjustment aims to streamline the company’s share structure, with the updated share count to be formalized in a future Shareholders’ Meeting. This move could potentially enhance shareholder value and optimize the company’s capital management strategy.

Gerdau S.A. Announces $500 Million Bond Redemption

On October 30, 2025, Gerdau S.A. announced that its subsidiary, GUSAP III LP, has been authorized to redeem all bonds issued with a principal amount of $500 million, an interest rate of 4.25%, and a maturity date in 2030. The redemption process, referred to as the ‘Make-Whole’, is set to occur on December 2, 2025, and is expected to impact the company’s financial strategy by potentially reducing future interest obligations.

Gerdau S.A. Reports Stable Financial Performance as of September 2025

On October 30, 2025, Gerdau S.A. released its condensed consolidated interim financial statements for the period ending September 30, 2025. The financial report indicates a stable financial position with total assets slightly increasing to R$87.26 billion from R$86.81 billion at the end of 2024. The report highlights a rise in cash and cash equivalents, as well as an increase in trade accounts receivable, suggesting improved liquidity and operational efficiency. This financial stability may enhance Gerdau’s industry positioning and provide confidence to stakeholders regarding its financial health.

Gerdau S.A. Announces Reduced CAPEX Plan for 2026

On October 1, 2025, Gerdau S.A. announced its CAPEX investment plan for 2025 and 2026, with a notable reduction in the 2026 budget to R$ 4.7 billion from R$ 6.0 billion in 2025. This plan focuses on maintenance and competitiveness projects, aiming to enhance equipment longevity and improve production efficiency. The company emphasizes that these investments are contingent on market conditions and economic scenarios, highlighting the potential variability in actual outcomes.