Ferroglobe (GSM) AI Stock Analysis

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Ferroglobe

(NASDAQ:GSM)

63Neutral

Ferroglobe's overall stock score reflects a combination of strengths and weaknesses. The company shows solid financial stability with improved cash flow management and reduced leverage. However, challenges remain in terms of declining revenue, high valuation, and uncertain market conditions. The technical indicators suggest caution, with the stock trading below key moving averages. The earnings call provided a balanced view of opportunities and risks, contributing to a moderate score.

Ferroglobe (GSM) vs. S&P 500 (SPY)

Market Cap

$646.32M

Dividend Yield1.54%

Average Volume (3M)1.30M

Price to Earnings (P/E)123.3

Beta (1Y)0.51

Revenue Growth-0.37%

EPS Growth-94.30%

CountryUS

Employees3,403

SectorBasic Materials

Sector Strength56

IndustryIndustrial Materials

Share Statistics

EPS (TTM)0.03

Shares Outstanding187,885,090

10 Day Avg. Volume1,461,264

30 Day Avg. Volume1,304,523

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.43

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$9.00

Price Target Upside161.63% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Ferroglobe Business Overview & Revenue Model

Company DescriptionFerroglobe PLC (GSM) is a leading producer of silicon metal, silicon-based alloys, and manganese-based alloys, operating primarily in the metals and mining sector. The company serves various industries, including automotive, construction, and energy, by providing essential materials that contribute to the production of aluminum alloys, silicones, and solar cells. With a global presence, Ferroglobe leverages its extensive network of production facilities, strategically located near key raw material sources, to maintain a competitive edge in the market.

How the Company Makes MoneyFerroglobe makes money by manufacturing and selling silicon metal, silicon-based alloys, and manganese-based alloys. The company generates revenue through long-term supply contracts and spot sales to a diverse customer base across different industries, including automotive, chemical, and solar energy. Key revenue streams include the sale of silicon metal, used in aluminum alloy production and the chemical industry, and manganese-based alloys, essential for steel production. Ferroglobe's earnings are influenced by factors such as commodity prices, production efficiencies, and strategic partnerships with suppliers and customers that help stabilize supply chains and optimize production costs.

Ferroglobe Financial Statement Overview

Summary

Ferroglobe's financial performance in 2024 shows mixed results. The company faced revenue and profitability pressures with declining margins, but improved its balance sheet strength and cash flow management. The reduced leverage and enhanced equity position provide a strong foundation, though sustaining profitability remains a challenge.

Income Statement

Positive

Ferroglobe has shown variability in its revenue and profitability, with a recent decline in revenue and gross profit from 2023 to 2024. The gross profit margin decreased to 37.5% in 2024 from 46.7% in 2023, and net profit margin fell to 0.3% from 5%. Despite this, the company managed to stay profitable in 2024. The EBIT and EBITDA margins also saw a significant decrease, indicating increased operational challenges.

Balance Sheet

Positive

The company has made improvements in its financial stability, with a lower debt-to-equity ratio of 0.26 in 2024 compared to 0.40 in 2023, indicating reduced leverage. The equity ratio increased to 56.1%, signifying a stronger equity position relative to total assets. Return on equity decreased to 0.6%, reflecting lower profitability relative to shareholders' equity.

Cash Flow

Positive

Ferroglobe improved its free cash flow in 2024 by 81.8% compared to 2023, reflecting better cash management. However, the operating cash flow to net income ratio declined, indicating potential challenges in converting income into cash flow. The free cash flow to net income ratio significantly improved, showing effective capital expenditure management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.64B	1.65B	2.60B	1.78B	1.14B
	Gross Profit
616.81M	770.75M	1.24B	496.68M	247.41M
	EBIT
19.89M	196.94M	686.65M	40.36M	-74.17M
	EBITDA
156.70M	268.34M	734.38M	128.58M	-47.26M
	Net Income Common Stockholders
5.24M	82.66M	440.31M	-100.33M	-188.67M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
138.54M	136.47M	317.94M	114.50M	103.72M
	Total Assets
1.45B	1.76B	1.98B	1.53B	1.39B
	Total Debt
210.55M	302.19M	443.15M	557.62M	504.55M
	Net Debt
77.58M	165.72M	125.21M	443.23M	401.83M
	Total Liabilities
638.20M	888.88M	1.21B	1.19B	970.78M
	Stockholders Equity
816.11M	748.06M	771.14M	335.07M	421.06M
Cash Flow		Free Cash Flow
167.09M	91.91M	351.72M	-28.94M	121.36M
	Operating Cash Flow
243.26M	178.37M	405.02M	-1.34M	154.27M
	Investing Cash Flow
-66.94M	-81.81M	-61.68M	-23.85M	-31.94M
	Financing Cash Flow
-175.51M	-282.15M	-140.46M	10.45M	-113.33M

Ferroglobe Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.44

Price Trends

50DMA

3.68

Negative

100DMA

3.86

Negative

200DMA

4.24

Negative

Market Momentum

MACD

-0.11

Negative

RSI

45.56

Neutral

STOCH

72.20

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSM, the sentiment is Negative. The current price of 3.44 is below the 20-day moving average (MA) of 3.51, below the 50-day MA of 3.68, and below the 200-day MA of 4.24, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 72.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GSM.

Ferroglobe Risk Analysis

Ferroglobe disclosed 72 risk factors in its most recent earnings report. Ferroglobe 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

Ferroglobe Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSM	63 Neutral	$646.32M	123.30	0.67%	1.54%	-0.37%	-94.30%
UAMY	62 Neutral	$366.82M	―	-6.39%	―	71.84%	72.93%
NEXA	51 Neutral	$803.90M	―	-20.22%	―	6.28%	29.57%
CMP	48 Neutral	$472.32M	―	-42.75%	1.61%	-9.30%	-136.46%
Sector *	48 Neutral	$1.92B	-1.99	-22.85%	3.95%	0.94%	-27.31%
TMC	46 Neutral	$1.06B	―	-667.42%	―	―	-3.49%
LZM	42 Neutral	$246.06M	―	-814.96%	―	―	―

* Basic Materials Sector Average

Performance Comparison

GSM

Ferroglobe

3.44

-1.51

-30.51%

CMP

Compass Minerals International

11.38

-1.86

-14.05%

UAMY

United States Antimony

3.20

2.97

1291.30%

NEXA

Nexa Resources SA

6.07

-1.26

-17.19%

TMC

TMC the metals company Inc.

2.96

1.32

80.49%

LZM

Lifezone Metals

3.17

-3.53

-52.69%

Ferroglobe Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -9.71% | Next Earnings Date: May 20, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Ferroglobe's strong financial performance, including debt repayment and the initiation of a capital return program. However, it also acknowledged significant challenges such as declining revenues in key segments, market softness, and uncertainty in global trade conditions. Despite these issues, the company remains optimistic about future growth driven by trade measures and its position in the EV battery market.

Highlights

Record Revenue and Cash Flow

Ferroglobe posted revenue of $1.6 billion and adjusted EBITDA of $154 million, with free cash flow of $164 million.

Debt Repayment and Financial Health

The company used strong cash flow generation to repay senior secured notes, eliminating $32 million in annual interest, and became net cash positive for the first time.

Capital Return Program Initiation

Ferroglobe initiated a capital return program with quarterly dividends and share buybacks, increasing dividends by approximately 8% in the first quarter of 2025.

Positive Trade Measures Impact

Trade measures by the U.S. and Europe, including antidumping and countervailing duties, are expected to benefit Ferroglobe significantly in the coming quarters.

Promising Outlook for EV Batteries

Ferroglobe sees potential in silicon metal for EV batteries, positioning itself to capitalize on the industry shift from graphite to silicon-rich anodes.

Lowlights

Decline in Silicon Metal Revenue

Silicon metal revenue declined 17% in Q4 to $161 million. Adjusted EBITDA for the segment also fell, influenced by higher costs and lower prices.

Challenges in European and North American Markets

Ferroglobe faced a challenging environment with soft market conditions in Europe and North America, affecting prices and volumes.

Lower Full Year EBITDA

Adjusted EBITDA for the full year was $154 million, down from $315 million in 2023, driven by higher energy costs and lower realized prices.

Uncertainty in Global Trade and Market Conditions

The company faces uncertainty due to potential trade measures, tariffs, and geopolitical issues, impacting its outlook and guidance for 2025.

Company Guidance

During Ferroglobe's fourth quarter and full-year 2024 earnings call, the company provided guidance for 2025, projecting an adjusted EBITDA range of $100 million to $170 million. This wide range reflects uncertainties in market conditions, trade cases, potential tariffs, and geopolitical issues. The firm reported 2024 revenue of $1.6 billion and adjusted EBITDA of $154 million. They also achieved a net cash positive position for the first time, enabling a capital return program with increased dividends by approximately 8% in the first quarter of 2025 and share buybacks initiated in the third quarter of 2024. The call highlighted the impact of global trade measures, such as the U.S. antidumping duties on ferrosilicon imports and the European Commission's ongoing safeguard investigations, which are expected to benefit Ferroglobe by improving its market share. Additionally, the company is optimistic about future growth due to anticipated improvements in end markets and ongoing advancements in silicon metal applications, particularly in the electric vehicle battery sector.

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.