Gerdau SA (GGB) AI Stock Analysis

• Market Cap: $7.60B
• Dividend Yield: 2.92%
• Average Volume (3M): 22.24M
• Price to Earnings (P/E): 32.6
• Beta (1Y): 0.96
• Revenue Growth: -2.53%
• EPS Growth: -36.08%
• Country: US
• Employees: 30,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): -0.13
• Shares Outstanding: 1,275,397,300
• 10 Day Avg. Volume: 12,713,116
• 30 Day Avg. Volume: 22,241,139
• PEG Ratio: -0.43
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 31.11
• Enterprise Value/Market Cap: 6.81
• Enterprise Value/Revenue: 0.74
• Enterprise Value/Gross Profit: 6.49
• Enterprise Value/Ebitda: 6.87
• 1Y Price Target: $4.65
• Price Target Upside: 37.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.45
• Revenue Forecast (FY): $13.49B

• Rating: 61 Neutral
• Price Target: $4.50 ▲(33.53% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by mixed financial performance: improved top-line and a solid balance sheet are outweighed by sharply weaker margins and weaker cash conversion. The latest earnings call adds modest support via lower 2026 CapEx, conservative leverage and buybacks, while technical indicators and valuation are broadly neutral rather than strong positives.

Positive Factors

North America operating strength

North America now drives a large share of group profitability via resilient end markets and backlog support. Higher-margin downstream growth (e.g., 39% YoY downstream activity) and sector exposure (non-residential, solar, data centers) structurally diversify earnings and reduce reliance on volatile Brazilian volumes, improving consolidated margin durability over coming months.

Conservative leverage and balance sheet

Material deleveraging and ample equity give Gerdau financial flexibility typical insurers of cyclical firms. Low leverage supports capital returns and targeted M&A, reduces refinancing risk during downturns, and underpins the company's ability to fund Miguel Burnier, sustain capex, or absorb temporary cash-flow volatility without forcing distress sales.

Improving cash generation and disciplined CapEx

Recent positive FCF and a deliberate ~23% CapEx reduction for 2026 materially enhance near-term cash flexibility. That supports dividends and recurring buybacks while freeing cash to invest in high-return projects (e.g., mining integration). Improved cash conversion reduces funding risk and strengthens the durability of shareholder returns over the next 2–6 months.

Negative Factors

Compressed profitability

Sharp margin compression signals a structural hit to earnings quality and ROE. Low net margins reduce the cushion against commodity and currency swings, making earnings and cash conversion more sensitive to input-cost spikes or temporary demand softness. Sustained low margins would constrain reinvestment and shareholder distributions.

Brazil market structural headwinds

Persistent import penetration and low domestic utilization create chronic overcapacity and pricing pressure in Brazil. Those conditions triggered BRL 2B of noncash impairments and raise the risk of further write‑downs or margin erosion if trade defense measures and Miguel Burnier ramping do not materially restore local competitiveness.

Rising input and operating cost pressure

Significant coal inflation and regional logistics cost volatility directly compress gross margins in commodity steel production. Because recovery of margins depends on both pricing power and lower input costs, sustained energy and freight inflation—or timing mismatches in passing costs to customers—could materially weaken cash generation and profitability in the medium term.

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 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

Mixed fundamentals: revenue rebounded strongly in TTM (+21.8%), and leverage is conservative for a cyclical steel business (debt-to-equity ~0.26–0.31). However, profitability compressed sharply (TTM net margin ~2.0% vs ~6.8% in 2024) and cash conversion weakened (TTM FCF ~1.2B; OCF coverage ~0.80), limiting overall quality of earnings.

Income Statement

Revenue rebounded in TTM (Trailing-Twelve-Months) (+21.8%), but profitability has compressed sharply versus prior years: net profit margin fell to ~2.0% in TTM from ~6.8% in 2024 and ~10.9% in 2023, with similar step-downs in gross and EBIT margins. Results show meaningful cyclicality—2021–2022 were peak years with very strong margins, followed by a multi-year normalization and a particularly weak TTM earnings conversion despite higher sales.

Balance Sheet

Leverage looks manageable for a cyclical steel business, with debt-to-equity improving materially from 2020 (~0.60) to a more conservative ~0.26–0.31 in 2023–TTM. Equity remains sizable (TTM ~53.6B) and supports the capital structure, though returns on equity have cooled significantly (TTM ~5.4% vs. ~15.3% in 2023 and ~24.8% in 2022), signaling reduced profitability rather than balance-sheet stress.

Cash Flow

Cash generation weakened in TTM (operating cash flow ~8.0B vs. ~11.4B in 2024), and free cash flow fell sharply to ~1.2B, resulting in low free cash flow relative to net income in TTM (~0.14). While free cash flow growth shows a large positive rate in TTM (off a depressed prior base), cash conversion is less consistent than in 2021–2023, and operating cash flow coverage dipped below 1.0 in TTM (~0.80), indicating earnings are not translating into cash as cleanly as before.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	69.86B	67.03B	68.92B	82.41B	78.35B
Gross Profit	7.97B	9.20B	11.33B	18.75B	20.82B
EBITDA	9.29B	9.39B	13.23B	19.69B	23.99B
Net Income	1.39B	4.57B	7.50B	11.43B	15.49B
Balance Sheet
Total Assets	81.69B	86.81B	74.89B	73.80B	73.81B
Cash, Cash Equivalents and Short-Term Investments	6.37B	8.28B	5.34B	5.43B	6.79B
Total Debt	15.57B	14.92B	12.17B	13.66B	14.98B
Total Liabilities	27.89B	28.64B	25.65B	27.50B	31.00B
Stockholders Equity	53.59B	57.95B	49.06B	46.12B	42.60B
Cash Flow
Free Cash Flow	1.31B	5.43B	5.80B	6.67B	9.32B
Operating Cash Flow	7.99B	11.38B	11.14B	11.15B	12.52B
Investing Cash Flow	-7.57B	-5.03B	-5.77B	-4.46B	-3.00B
Financing Cash Flow	-1.72B	-2.69B	-4.13B	-8.26B	-9.98B

Gerdau SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.37
• 50DMA: Negative
• 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 Neutral. The current price of 3.37 is below the 20-day moving average (MA) of 4.19, below the 50-day MA of 4.07, and above the 200-day MA of 3.34, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 44.06 is Neutral, neither overbought nor oversold. The STOCH value of 41.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GGB.

Gerdau SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	69 Neutral	$4.97B	63.48	5.84%	―	-16.81%	-67.68%
CMC	67 Neutral	$8.13B	18.89	10.51%	1.02%	-1.61%	-81.36%
TX	65 Neutral	$8.53B	20.02	3.49%	7.02%	-16.69%	585.38%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
GGB	61 Neutral	$7.60B	32.61	2.47%	2.92%	-2.53%	-36.08%
SID	53 Neutral	$2.22B	-8.29	-10.50%	―	-5.79%	-5.30%
CLF	49 Neutral	$6.08B	-3.65	-22.96%	―	-6.76%	-255.94%

Gerdau SA Corporate Events

Gerdau Posts Strong 2025 North American Results as Brazilian Imports Squeeze Margins

On February 24, 2026, Gerdau S.A. reported its 2025 results, highlighting 11.6 million tonnes of steel shipments, up 5.9% year on year, and adjusted EBITDA of R$10.1 billion driven by strong North American performance despite weaker conditions in Brazil and South America. Net income fell 21% to R$3.4 billion amid R$2.0 billion in non-cash impairment charges in Brazil, while free cash flow reached R$394 million for the year and R$1.411 billion in the fourth quarter, supporting dividends, the completion of a 2025 share buyback equal to about 3% of outstanding shares, and the launch of a 2026 buyback program of up to 56.4 million shares.

The company invested R$6.1 billion in capex in 2025 and guided a 24% reduction to R$4.7 billion in 2026, with leverage at 0.76x, underscoring balance sheet capacity to sustain strategic projects such as the Miguel Burnier mining operation, which reached 91% physical progress and is in integrated testing. Management flagged record imported steel penetration in Brazil as a continuing competitive pressure despite trade defense advances, contrasted with robust demand and margin expansion in North America, where backlogs remain high and sectors such as non-residential construction, solar and data centers support growth, shaping a mixed but resilient outlook for 2026 across its key markets.

The most recent analyst rating on (GGB) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Gerdau SA stock, see the GGB Stock Forecast page.

Gerdau Posts Resilient 4Q25 Results and Launches New Share Buyback Program

Gerdau S.A. reported its fourth-quarter 2025 results on February 23, 2026, highlighting resilient performance in North America that offset seasonal weakness, maintenance shutdowns, and intense import competition in Brazil, and a more challenging environment in South America. The company posted 4Q25 steel shipments of 2.9 million tonnes, net sales of R$17.0 billion, adjusted EBITDA of R$2.4 billion, and strong free cash flow, while maintaining low leverage and reaffirming its CAPEX focus on competitiveness, renewable energy, and mining expansion.

Management emphasized that North America accounted for 73% of consolidated EBITDA in 4Q25, supported by robust demand, better pricing, and Section 232-related trade rebalancing, while in Brazil imported steel penetration reached 21% amid ongoing antidumping actions and tariff hikes to protect local producers. For 2025, Gerdau invested R$6.1 billion in CAPEX, distributed roughly R$1.2 billion in dividends, completed a share buyback equal to 3% of outstanding shares, and on February 23, 2026 approved a new 18‑month buyback program of up to 56.4 million shares, underscoring its strategy of disciplined capital allocation and shareholder returns as it marks its 125th anniversary.

The most recent analyst rating on (GGB) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Gerdau SA stock, see the GGB Stock Forecast page.

Gerdau Announces Interim 2025 Dividend Payout Schedule for Local Shares and ADRs

On February 23, 2026, the boards of Gerdau S.A. and Metalúrgica Gerdau S.A. approved interim dividend payments as an advance on the minimum dividend for the 2025 fiscal year, signaling continued cash returns to shareholders. The companies set a record date of March 10, 2026 for their Brazilian shares and March 12, 2026 for Gerdau’s ADRs, with per-share dividends of R$0.05 for Metalúrgica Gerdau and R$0.10 for Gerdau, reinforcing shareholder remuneration while outlining standard deadlines after which unclaimed dividends revert to the companies under Brazilian law.

Dividend payments for Gerdau shares are scheduled for March 18, 2026, for Metalúrgica Gerdau on March 19, 2026, and for Gerdau ADRs on March 25, 2026, to be processed via BTG Pactual as the depository institution. The move underlines management’s commitment to predictable payouts and may be read as a sign of confidence in cash generation ahead of the full 2025 results, offering clarity to both local and international investors on the timing and mechanics of the distributions.

The most recent analyst rating on (GGB) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Gerdau SA stock, see the GGB Stock Forecast page.

Gerdau Completes 2025 Share Buyback Program at Full Authorized Volume

On December 19, 2025, Gerdau S.A. announced it had completed its 2025 share buyback program, which had been launched on January 20, 2025. Over the course of the program, the company repurchased 1,500,000 common shares (GGBR3) at an average price of R$15.65 and 63,000,000 preferred shares (GGBR4 and ADRs backed by preferred shares) at an average price of R$16.27, reaching 100% of the authorized buyback volume. The conclusion of the program signals a significant capital allocation move by Gerdau, potentially enhancing shareholder value through reduced free float and reflecting management’s confidence in the company’s valuation and long-term prospects.

The most recent analyst rating on (GGB) stock is a Buy with a $4.60 price target. To see the full list of analyst forecasts on Gerdau SA stock, see the GGB Stock Forecast page.

Gerdau S.A. Completes $500M Bond Prepayment

On December 2, 2025, Gerdau S.A. announced that its subsidiary, GUSAP III LP, completed the financial settlement for the prepayment of bonds worth $500 million, originally set to mature in 2030. This move, which involved a total redemption amount of over $509 million, reflects Gerdau’s strategic financial management and may impact its financial operations and investor relations positively.

The most recent analyst rating on (GGB) stock is a Buy with a $3.50 price target. To see the full list of analyst forecasts on Gerdau SA stock, see the GGB Stock Forecast page.