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Gerdau SA (GGB)
NYSE:GGB
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Gerdau SA
(NYSE:GGB)
Rating:73Outperform
Price Target:
$3.00
▲( 9.89% Upside)
Gerdau SA (GGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.53B
Dividend Yield5.06%
Average Volume (3M)11.13M
Price to Earnings (P/E)9.7
Beta (1Y)0.89
Revenue Growth-9.33%
EPS Growth-51.03%
CountryUS
Employees30,000
SectorBasic Materials
Sector Strength63
IndustrySteel
Share Statistics
EPS (TTM)0.07
Shares Outstanding1,309,848,800
10 Day Avg. Volume14,885,436
30 Day Avg. Volume11,134,531
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.54
Price to Sales (P/S)0.00
P/FCF Ratio7.25
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside9.89% Upside
Rating ConsensusHold
Number of Analyst Covering2
Gerdau SA Business Overview & Revenue Model
Company DescriptionGerdau SA (GGB) is a leading Brazilian steel manufacturer and one of the largest producers of long steel in the Americas. The company operates in various sectors including construction, industrial, automotive, and agricultural. Its core products include steel products such as rebar, wire rod, merchant bars, and structural shapes. Gerdau also produces specialty steels for high-end applications and offers recycling services, contributing to sustainable steel production.
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 exhibits solid financial health with strong profitability and a stable balance sheet. While cash flow management is efficient, the company faces challenges in sustaining revenue growth. Despite these challenges, the company's financial position remains robust 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 | ||||
| 68.19B | 67.03B | 68.92B | 82.41B | 78.35B | 43.81B | Gross Profit |
| 8.73B | 9.20B | 11.33B | 18.75B | 20.82B | 5.93B | EBIT |
| 6.03B | 6.34B | 9.02B | 17.37B | 22.06B | 5.86B | EBITDA |
| 8.41B | 9.39B | 13.23B | 19.69B | 23.99B | 8.36B | Net Income Common Stockholders |
| 3.27B | 4.57B | 7.50B | 11.43B | 15.49B | 2.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.94B | 8.28B | 5.34B | 5.43B | 6.79B | 7.66B | Total Assets |
| 76.96B | 86.81B | 74.89B | 73.80B | 73.81B | 63.12B | Total Debt |
| 12.35B | 14.92B | 12.20B | 13.66B | 14.98B | 18.39B | Net Debt |
| 8.61B | 7.15B | 9.19B | 11.19B | 10.82B | 13.78B | Total Liabilities |
| 24.85B | 28.64B | 25.65B | 27.50B | 31.00B | 32.04B | Stockholders Equity |
| 51.92B | 57.95B | 49.06B | 46.12B | 42.60B | 30.86B |
| Cash Flow | Free Cash Flow | ||||
| 4.23B | 5.43B | 5.80B | 6.67B | 9.32B | 4.60B | Operating Cash Flow |
| 10.94B | 11.38B | 11.14B | 11.15B | 12.52B | 6.41B | Investing Cash Flow |
| -7.78B | -5.03B | -5.77B | -4.46B | -3.00B | -2.23B | Financing Cash Flow |
| -1.58B | -2.69B | -4.13B | -8.26B | -9.98B | -2.49B |
Gerdau SA Technical Analysis
Neutral
2.73
Price Trends
2.70
Positive
2.78
Negative
3.01
Negative
Market Momentum
0.03
Negative
53.52
Neutral
61.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGB, the sentiment is Neutral. The current price of 2.73 is above the 20-day moving average (MA) of 2.67, above the 50-day MA of 2.70, and below the 200-day MA of 3.01, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 61.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $5.53B | 9.70 | 5.86% | 5.06% | -9.33% | -51.03% | |
73 Outperform | $20.10B | 17.89 | 13.08% | 1.42% | -7.42% | -48.08% | |
67 Neutral | $25.73B | 18.33 | 2.60% | 1.38% | -8.56% | 68.36% | |
62 Neutral | $5.58B | 73.52 | -2.75% | 11.06% | -10.20% | -152.18% | |
61 Neutral | $9.32B | 139.78 | 0.86% | 0.47% | -14.79% | -88.78% | |
55 Neutral | $2.13B | ― | -16.28% | 13.01% | -9.84% | -14783.33% | |
50 Neutral | $1.98B | -1.07 | -21.34% | 3.71% | 2.03% | -30.65% |
* Basic Materials Sector Average
Performance Comparison
GGB
Gerdau SA
2.72
-0.70
-20.47%
MT
ArcelorMittal
29.96
4.82
19.17%
SID
Companhia Siderúrgica Nacional
1.57
-0.83
-34.58%
STLD
Steel Dynamics
129.89
-1.63
-1.24%
TX
Ternium SA
27.75
-11.81
-29.85%
X
United States Steel
42.90
7.15
20.00%
Gerdau SA Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 1.49%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with noteworthy achievements in safety, recognition, and North American performance offset by challenges in cost management and market conditions in Brazil. The company demonstrated strong capital allocation strategies but faces uncertainties in domestic and international markets.Q1-2025 Updates
Positive Updates
Improved Safety and Health Performance
Achieved an accident frequency rate of 0.61, reaffirming the company's commitment to health and safety.
IRMA Standard Recognition
Miguel Burnier iron ore mine received IRMA Standard recognition, joining an exclusive group of 11 mines worldwide.
Expansion of Hot Rolled Coil Production
Increased production capacity in Ouro Branco, enhancing product offerings in the Brazilian market.
Strong Performance in North America
Adjusted EBITDA was BRL2.4 billion with net income of BRL758 million, supported by higher volumes and better prices in North America.
Successful Capital Allocation
Executed 44% of Gerdau S.A.'s share buyback program, investing BRL444 million, reflecting a payout of 74% of net income.
Negative Updates
Increased Costs in Brazil
Higher costs due to the implementation of a new hot-rolled coil mill impacted Brazil's operation.
Oversupply in the Domestic Market
Brazilian market affected by an influx of imported steel, with a penetration rate reaching 22%, up by 3 percentage points from the previous quarter.
Challenging Business Environment in Brazil
The domestic market continues to be impacted by excessive imported steel, affecting profitability.
Potential Economic Uncertainty in the U.S.
Concerns about a more uncertain business environment and potential recession impacts in the U.S.
Company Guidance
In the first quarter of 2025, Gerdau reported a stable financial performance with an adjusted EBITDA of BRL2.4 billion and a net income of BRL758 million, translating to BRL0.37 per share. The company's accident frequency rate was 0.61, reflecting a commitment to safety. The Miguel Burnier iron ore mine received IRMA Standard recognition, showcasing Gerdau's dedication to sustainability. The hot rolled coil production capacity expansion in Ouro Branco increased the share of flat steel in Gerdau's portfolio. The penetration rate of imported steel in the Brazilian market rose to 22%, up by nearly 3 percentage points from the previous quarter, indicating challenges in the quota tariff system. The company maintained a net debt over EBITDA ratio of 0.69, supporting continued strategic investments and a shareholder payout of 74% of net income. By April 11, 44% of the share buyback program was executed, investing BRL444 million. Gerdau's North American operations saw increased volumes and a healthy order backlog, while the Brazilian market faced oversupply pressures.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.