Gerdau SA (GGB) AI Stock Analysis

• Market Cap: $5.72B
• Dividend Yield: 2.9%
• Average Volume (3M): 13.75M
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.90
• Revenue Growth: -9.33%
• EPS Growth: -51.03%
• Country: US
• Employees: 30,000
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Steel
• EPS (TTM): 0.07
• Shares Outstanding: 1,309,848,800
• 10 Day Avg. Volume: 14,429,765
• 30 Day Avg. Volume: 13,752,700
• PEG Ratio: 0.21
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.33
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.45
• Price Target Upside: 18.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: $3.50 ▲(19.86%Upside)

Gerdau SA's overall stock score reflects a robust financial position and solid earnings performance, especially in North America. The technical analysis indicates current bullish momentum, though caution is advised due to overbought signals. Valuation metrics suggest the stock is attractively priced, complemented by a healthy dividend yield. Challenges in the Brazilian market and potential economic uncertainties in the U.S. pose risks, but the company's strategic initiatives provide confidence in its future performance.

Gerdau SA Business Overview & Revenue Model

Company Description

Gerdau 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 Money

Gerdau SA generates revenue primarily through the sale of steel products, which are manufactured in its facilities located across Brazil, North America, and other parts of Latin America. The company's key revenue streams include the sale of long carbon steel and long special steel, which are used extensively in the construction and automotive industries, respectively. Additionally, Gerdau benefits from a strong distribution network that allows for efficient product delivery to its diverse customer base. The company also engages in strategic partnerships to enhance its market reach and technological capabilities, contributing to its revenue. Factors such as global steel demand, raw material prices, and economic conditions in the regions where it operates significantly impact Gerdau's 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.

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.

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.

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
EBITDA	8.41B	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	85.58B	86.81B	74.89B	73.80B	73.81B	63.12B
Cash, Cash Equivalents and Short-Term Investments	6.87B	8.28B	5.34B	5.43B	6.79B	7.66B
Total Debt	15.99B	14.92B	12.20B	13.66B	14.98B	18.39B
Total Liabilities	29.36B	28.64B	25.65B	27.50B	31.00B	32.04B
Stockholders Equity	56.02B	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

• Technical Analysis Sentiment: Positive
• Last Price: 2.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 2.92 is below the 20-day moving average (MA) of 2.95, above the 50-day MA of 2.78, and below the 200-day MA of 2.98, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 52.75 is Neutral, neither overbought nor oversold. The STOCH value of 43.49 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
STLD	75 Outperform	$19.32B	17.20	13.08%	1.56%	-7.42%	-48.08%
GGB	73 Outperform	$5.72B	10.12	5.86%	2.90%	-9.33%	-51.03%
MT	67 Neutral	$26.08B	18.40	2.60%	0.74%	-8.56%	68.36%
X	64 Neutral	$12.42B	186.15	0.86%	0.36%	-14.79%	-88.78%
Sector *	62 Neutral	$10.11B	9.67	-0.15%	3.01%	2.10%	-35.27%
TX	58 Neutral	$5.98B	73.52	-2.75%	11.96%	-10.20%	-152.18%
SID	49 Neutral	$1.82B	―	-16.28%	13.13%	-9.84%	-14783.33%