Ferroglobe (GSM) AI Stock Analysis

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Ferroglobe

(NASDAQ:GSM)

Rating:55Neutral

Price Target:

$4.00

▲( 5.26% Upside)

Ferroglobe's overall stock score reflects significant financial performance challenges, particularly in declining revenues and profitability. Technical analysis shows short-term positive momentum but long-term caution. Valuation remains problematic with ongoing losses. The earnings call provides a balanced view with some optimism for recovery, but current market conditions are difficult.

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

Market Cap

$714.78M

Dividend Yield1.38%

Average Volume (3M)1.13M

Price to Earnings (P/E)27.9

Beta (1Y)0.54

Revenue Growth-4.98%

EPS Growth-192.96%

CountryUS

Employees3,283

SectorBasic Materials

Sector Strength60

IndustryIndustrial Materials

Share Statistics

EPS (TTM)-0.20

Shares Outstanding186,625,870

10 Day Avg. Volume1,208,263

30 Day Avg. Volume1,127,506

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)1.08

Price to Sales (P/S)0.00

P/FCF Ratio5.28

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue0.11

Enterprise Value/Gross Profit1.48

Enterprise Value/Ebitda1.24

Forecast

1Y Price Target

$8.00

Price Target Upside110.53% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Ferroglobe Business Overview & Revenue Model

Company DescriptionFerroglobe PLC operates in the silicon and specialty metals industry in the United States, Europe, and internationally. It provides silicone chemicals that are used in a range of applications, including personal care items, construction-related products, health care products, and electronics, as well as silicon metal for primary and secondary aluminum producers; silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. The company also offers ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; calcium silicon, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal and in pyrotechnics; and nodularizers and inoculants, which are used in the production of iron. In addition, it provides silica fume, a by-product of the electrometallurgical process of silicon metal and ferrosilicon. Further, the company operates quartz mines in Spain, South Africa, the United States, and Canada; and low-ash metallurgical coal mines in the United States, as well as holds interests in hydroelectric power plant in France. It serves silicone chemical, aluminum, and steel manufacturers; auto companies and their suppliers; ductile iron foundries; manufacturers of photovoltaic solar cells and computer chips; and concrete producers. The company was formerly known as VeloNewco Limited and changed its name to Ferroglobe PLC in December 2015. The company was incorporated in 2015 and is headquartered in London, the United Kingdom. Ferroglobe PLC is a subsidiary of Grupo Villar Mir, S.A.U.

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 is facing financial challenges, with declining revenues and profitability issues evident in the income statement. The balance sheet indicates moderate leverage, but shareholder equity has decreased, suggesting potential financial instability. Cash flow remains positive, but the declining free cash flow growth is concerning. Overall, strategic realignment is needed to improve profitability and stabilize financial health.

Income Statement

Neutral

Ferroglobe's income statement shows declining revenue and profitability. The TTM period reveals a negative EBIT and net income, indicating operational challenges. The gross profit margin has decreased over recent periods, and there is significant volatility in net profit margins. Notably, revenue growth has been negative, highlighting a potential decline in market demand or competitive challenges.

Balance Sheet

Neutral

The balance sheet presents a mixed picture with a reasonable equity ratio and a manageable debt-to-equity ratio, indicating a moderate leverage level. However, the decline in stockholders' equity suggests erosion of shareholder value. The return on equity has turned negative in the latest TTM period, reflecting profitability challenges.

Cash Flow

Neutral

Cash flow analysis shows a positive operating cash flow, which is a good indicator of liquidity. However, the free cash flow growth rate has declined, raising concerns about future cash generation potential. The operating cash flow to net income ratio is favorable, but the free cash flow to net income ratio indicates challenges in converting profits into cash.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.56B	1.64B	1.65B	2.60B	1.78B	1.14B
	Gross Profit
478.77M	616.81M	770.75M	1.24B	496.68M	247.41M
	EBIT
-38.36M	38.18M	196.94M	686.65M	40.36M	-74.17M
	EBITDA
61.17M	134.46M	268.34M	734.38M	128.58M	-47.26M
	Net Income Common Stockholders
-59.22M	23.54M	82.66M	440.31M	-100.33M	-188.67M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
137.84M	138.54M	136.47M	317.94M	114.50M	103.72M
	Total Assets
1.54B	1.47B	1.76B	1.98B	1.53B	1.39B
	Total Debt
118.95M	198.82M	302.19M	443.15M	557.62M	504.55M
	Net Debt
-10.33M	65.85M	165.72M	125.21M	443.23M	401.83M
	Total Liabilities
759.93M	638.20M	888.88M	1.21B	1.19B	970.78M
	Stockholders Equity
666.83M	720.51M	748.06M	771.14M	335.07M	421.06M
Cash Flow		Free Cash Flow
135.82M	167.09M	91.91M	351.72M	-28.94M	121.36M
	Operating Cash Flow
210.24M	243.26M	178.37M	405.02M	-1.34M	154.27M
	Investing Cash Flow
-72.45M	-66.94M	-81.81M	-61.68M	-23.85M	-31.94M
	Financing Cash Flow
-22.06M	-175.51M	-282.15M	-140.46M	10.45M	-113.33M

Ferroglobe Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.80

Price Trends

50DMA

3.66

Positive

100DMA

3.75

Positive

200DMA

4.03

Negative

Market Momentum

MACD

0.08

Negative

RSI

55.21

Neutral

STOCH

66.79

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSM, the sentiment is Positive. The current price of 3.8 is above the 20-day moving average (MA) of 3.69, above the 50-day MA of 3.66, and below the 200-day MA of 4.03, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 55.21 is Neutral, neither overbought nor oversold. The STOCH value of 66.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 3 New Risks

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares. Q4, 2023

The Company may be restricted or unable to pay cash dividends in the future. Q4, 2023

Changes in laws, rules or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws, rules, regulations and standards, or contractual or other obligations relating to data privacy and security, could result in claims, changes to our business practices, penalties, increased cost of operations and could have a material adverse effect on our reputation, results of operations, financial condition and cash flows. Q4, 2023

Ferroglobe Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEXA	58 Neutral	$721.79M	―	-16.64%	―	12.30%	42.72%
GSM	55 Neutral	$714.78M	27.86	-7.29%	1.38%	-4.98%	-192.96%
UAMY	54 Neutral	$308.96M	―	-4.38%	―	105.14%	84.95%
CMP	53 Neutral	$801.20M	―	-46.32%	1.61%	5.81%	-78.45%
Sector *	50 Neutral	$2.00B	-1.02	-21.34%	3.70%	2.00%	-30.65%
TMC	42 Neutral	$1.66B	―	-667.42%	―	―	-3.49%
LZM	38 Underperform	$272.96M	―	-814.96%	―	―	―

* Basic Materials Sector Average

Performance Comparison

GSM

Ferroglobe

3.80

-2.18

-36.45%

CMP

Compass Minerals International

19.16

6.15

47.27%

UAMY

United States Antimony

2.50

2.23

825.93%

NEXA

Nexa Resources SA

5.48

-2.29

-29.47%

TMC

TMC the metals company Inc.

4.39

2.94

202.76%

LZM

Lifezone Metals

3.15

-4.40

-58.28%

Ferroglobe Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 11.44%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Neutral

Ferroglobe's earnings call presented a mixed outlook. While the company maintained a strong balance sheet and highlighted positive impacts from expected trade measures and operational efficiencies, significant challenges were reported in the silicon metal segment, including volume and price declines. The sentiment is balanced with optimism for future improvements due to regulatory measures.

Q1-2025 Updates

Positive Updates

Strong Balance Sheet

Ferroglobe maintained a strong balance sheet with a positive net cash position of $19 million at the end of the first quarter, demonstrating resilience in a challenging market environment.

Positive Impact of Trade Measures

Several regulatory trade measures are expected to stabilize the market and create a more constructive environment, which should benefit Ferroglobe as the largest producer with operations that are nearly 100% backwards integrated.

Silicon-Based Alloys Revenue Increase

Silicon-based alloys revenue increased by 7% in the first quarter, driven by a 9% increase in volume.

Operational Efficiency and Free Cash Flow Generation

Despite challenging market conditions, Ferroglobe generated $5 million of free cash flow by efficiently managing working capital.

Positive Trends in Silicon Beta and Manganese Segments

The silicon beta market showed positive trends with a 9% increase in volume, and the manganese segment continued to show solid demand.

Negative Updates

Significant Decline in Silicon Metal Segment

The silicon metal segment experienced a 27% drop in volume, leading to negative adjusted EBITDA of $27 million for the first quarter.

Revenue and Price Declines

Revenue decreased by 16% in the first quarter, with a 35% decrease in silicon metal revenue and an 11% drop in silicon metal average selling prices.

Increased Costs and Negative EBITDA Margin

Raw material costs increased as a percentage of sales, and the company reported an adjusted EBITDA margin of negative 9% for the first quarter.

Impact of Low-Price Imports

Increased imports from countries like Brazil, Australia, Malaysia, Norway, and Thailand negatively impacted volumes and pricing.

Company Guidance

During Ferroglobe's first quarter 2025 earnings call, management provided guidance amidst challenging market conditions, with a noted 27% drop in silicon metal volumes and a 9% decline in the US silicon metal index pricing from the previous quarter. Despite this, Ferroglobe is optimistic about a recovery, anticipating positive adjusted EBITDA in the second quarter and maintaining their full-year guidance of $100 million to $170 million in adjusted EBITDA. The company highlighted several trade measures, including substantial anti-dumping duties ranging up to 1,042% for countries such as Russia and Kazakhstan, which are expected to stabilize the market. Additionally, Ferroglobe emphasized their strong balance sheet, positive net cash position of $19 million, and strategic investments, alongside a modest 8% dividend increase and ongoing share repurchases. They generated $5 million in free cash flow, driven by a $25 million reduction in working capital, and plan to fully implement their sales and operational planning (S&OP) by the end of 2025 to further enhance their operational efficiency.

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.