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Insteel Industries (IIIN)
NYSE:IIIN
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Insteel Industries
(NYSE:IIIN)
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Rating:66Neutral
Price Target:
$35.00
▲(10.55% Upside)
The score is driven primarily by strong balance-sheet quality and improving profitability, tempered by a significant deterioration in recent cash flow and working-capital pressures. Valuation is supportive with a reasonable P/E and solid dividend yield, while technicals are mixed with the stock still below longer-term moving averages. Earnings-call guidance is constructive on spreads/margins but highlights near-term liquidity and inventory risks.
Positive Factors
Balance-sheet strength
Essentially zero debt and sizable equity provide durable solvency in a cyclical metal fabrication industry. This financial flexibility supports continued capex, special dividends and buybacks, and reduces default risk, allowing the company to sustain operations through multi-quarter downturns.
Improving gross margins
A 400bp YoY margin expansion signals improving spreads and effective price realization versus input costs. If management sustains price discipline and cost control, higher margins can persist beyond the near term, enhancing earnings durability even amid cyclical demand swings.
Structural demand drivers
Exposure to data centers and IIJA infrastructure creates multi-year, non-residential demand that is less correlated with soft residential markets. These secular projects improve revenue visibility and help stabilize volumes and utilization across several quarters, supporting medium-term fundamentals.
Negative Factors
Weak cash generation
A large drop in operating cash and near‑zero FCF vs prior years shows weakening cash conversion. Persistent OCF weakness constrains internal funding for capex and returns, raises reliance on liquidity facilities, and magnifies vulnerability to further working-capital swings over the next several quarters.
Elevated inventories / working capital
Large inventory builds tie up cash and raise carrying costs and obsolescence risk. Until inventories normalize, working-capital pressure will limit liquidity and could compress margins if selling prices soften, making near-term cash flow and capital-return plans less certain.
Raw-material supply and tariff risk
Reliance on imports due to domestic curtailments and tariff uncertainty increases cost volatility, freight exposure, and procurement complexity. Structural input-price divergence and policy risk can persist for months, pressuring margins and planning, especially for a company with material raw‑input intensity.
Insteel Industries (IIIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$622.24M
Dividend Yield3.49%
Average Volume (3M)147.78K
Price to Earnings (P/E)13.2
Beta (1Y)1.13
Revenue Growth22.39%
EPS Growth112.75%
CountryUS
Employees929
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.39
Shares Outstanding19,396,380
10 Day Avg. Volume195,936
30 Day Avg. Volume147,783
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)2.02
Price to Sales (P/S)1.16
P/FCF Ratio39.57
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue0.92
Enterprise Value/Gross Profit6.14
Enterprise Value/Ebitda7.77
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Insteel Industries Business Overview & Revenue Model
Company DescriptionInsteel Industries, Inc., together with its subsidiaries, manufactures and markets steel wire reinforcing products for concrete construction applications. The company offers prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. Its PC strand is a seven-wire strand that is used to impart compression forces into precast concrete elements and structures providing reinforcement for bridges, parking decks, buildings, and other concrete structures. The company's WWR engineered reinforcing product is used in nonresidential and residential construction. It produces a range of WWR products, such as engineered structural mesh, an engineered made-to-order product that is used as the primary reinforcement for concrete elements or structures serving as a reinforcing solution for hot-rolled rebar; concrete pipe reinforcement, an engineered made-to-order product, which is used as the primary reinforcement in concrete pipe, box culverts, and precast manholes for drainage and sewage systems, water treatment facilities, and other related applications; and standard welded wire reinforcement, a secondary reinforcing product for crack control applications in residential and light nonresidential construction, including driveways, sidewalks, and various slab-on-grade applications. The company sells its products through sales representatives to the manufacturers of concrete products, rebar fabricators, distributors, and contractors primarily in the United States, Canada, Mexico, and Central and South America. Insteel Industries, Inc. was founded in 1953 and is headquartered in Mount Airy, North Carolina.
How the Company Makes MoneyInsteel Industries generates revenue primarily through the sale of its concrete reinforcement and industrial wire products. The company's key revenue streams include the sale of welded wire reinforcement, rebar, and other fabricated wire products to contractors, distributors, and manufacturers involved in construction and industrial activities. In addition to direct sales, Insteel benefits from long-term contracts with major customers in the construction sector, which provides a stable revenue base. The company also engages in strategic partnerships with construction firms and distributors to enhance its market reach. Fluctuations in steel prices and demand within the construction industry significantly affect the company's earnings, making it essential for Insteel to effectively manage its production costs and supply chain operations.
Insteel Industries Earnings Call Summary
Earnings Call Date:Jan 15, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presents a favorable operating performance year-over-year with substantial earnings, margin and price improvements, successful integration of recent acquisitions, continued shareholder returns, and positive demand signals (notably data centers and IIJA-related projects). Offsetting these positives are near-term liquidity and working-capital pressures from elevated inventories due to offshore raw material purchases, a sequential margin pull from higher-cost inventory consumption, a large year-over-year swing in operating cash flow, and ongoing supply and tariff uncertainties that could pressure costs and volumes. Management articulated confidence in 2026 while acknowledging these risks and a planned $20 million CapEx program to support growth and efficiency.Q1-2026 Updates
Positive Updates
Substantial YoY Earnings Improvement
Net earnings rose to $7.276 million ($0.39 per share) versus $1.1 million ($0.06 per share) in the prior-year quarter — EPS up approximately 550% year-over-year. Management noted last year's quarter included $1.0 million of restructuring and acquisition-related charges that reduced EPS by ~$0.04.
Shipment Growth
First-quarter shipments increased 3.8% year-over-year despite seasonally soft quarter (Q1 is typically weakest due to winter/holidays); sequential shipments declined 9.7% from Q4 in line with normal seasonality.
Selling Price Gains
Average selling prices increased 18.8% year-over-year (sequentially essentially unchanged from Q4). Management implemented additional price increases that took effect in January to offset rising scrap/wire rod costs.
Improved Gross Profit and Margin (YoY)
Gross profit rose to $18.1 million from $9.5 million a year ago. Gross margin expanded by 400 basis points to 11.3% from 7.3%, driven by wider spreads, higher volumes, and lower unit manufacturing costs.
SG&A Discipline and Leverage
SG&A increased by ~$0.9 million to $8.8 million (5.5% of net sales) vs $7.9 million (6.1% of net sales) prior year — SG&A growth (<11%) trailed sales growth (~23%), reflecting operating leverage; part of the increase was a ~$0.8 million rise in incentive compensation tied to stronger results.
Capital Return to Shareholders
Returned $19.4 million via a $1.00 per share special cash dividend (in addition to the regular dividend) in December and repurchased ~$745,000 of common stock (~24,000 shares) during the quarter.
Solid Liquidity Position
Ended the quarter with $15.6 million in cash and no borrowings on a $100 million revolving credit facility. Q1 capital expenditures were $1.5 million with a full-year CapEx target of $20 million to support growth and cost reduction.
Encouraging Market Signals and Demand Drivers
Management highlighted strength from data center construction and IIJA-funded projects. Dodge Momentum Index showed a 7% increase in December and DMI was up >50% year-over-year (commercial segment +45%). Management reported brisk order entry into January and that 2026 is expected to be a strong year.
Negative Updates
Inventory Build and Working Capital Consumption
Net working capital used $16.6 million of cash in Q1, driven by a $34.5 million increase in inventories (partially offset by a $14.1 million reduction in receivables). Management noted net working capital has risen by over $50 million in the last twelve months due to offshore purchases of raw material.
Sequential Margin and Gross Profit Decline
On a sequential basis, gross profit declined by $10.5 million from Q4 and gross margin narrowed by 480 basis points, primarily due to the consumption of higher-cost inventory.
Operating Cash Flow Swing
Cash flow from operations used $0.7 million in the quarter versus providing $19.0 million in the year-ago quarter, reflecting the inventory build and timing differences.
Raw Material Supply Constraints and Tariff Exposure
Domestic wire rod supply has tightened materially (mill closures and curtailed capacity), pushing management to import raw material. Domestic wire rod prices are cited as 50%–100% higher than global market prices; Section 232 tariff uncertainty poses ongoing pricing/availability risk and increases complexity/costs (freight, larger purchase quantities).
Macro Construction Headwinds
Architectural Billing Index (ABI) remained in contraction at 45.3 (13th consecutive month below 50). Through August, total construction spending was down ~1.6% year-over-year; nonresidential spending down ~1.5%; cement shipments down 4.3% in August (down 3.4% YTD).
Increased Inventory Carrying Levels
Inventories represented approximately 3.9 months of shipments (forward-looking) versus 3.5 months in Q4, reflecting higher raw material purchases (including offshore), larger purchase lot sizes, and an increased average carrying cost — elevating short-term liquidity and working capital needs.
Inflationary and Labor Pressure
Management noted persistent upward pressure on labor and other operating costs (healthcare, spare parts, energy), and that inflation-related increases across inputs remain an operating headwind.
Company Guidance
Management said they expect 2026 to be a strong year and provided specific near‑term guidance: price increases implemented in January should boost Q2 spreads and margins as FIFO inventory turns; they expect inventory levels to moderate in Q2 after Q1 inventories rose to about 3.9 months of forward shipments (3.5 months at 4Q), with Q1 net working capital using $16.6 million driven by a $34.5 million inventory build and a $14.1 million reduction in receivables; cash from operations used $0.7 million in Q1 (vs. $19 million provided a year ago), ending the quarter with $15.6 million of cash and no borrowings on a $100 million revolver; first‑quarter capex was $1.5 million with a full‑year capex target of $20 million; the company expects an effective tax rate of roughly 23% for the rest of the year (Q1 rate 21% vs. 26.1% prior year); management will continue importing wire rod until domestic supply improves (noting domestic wire rod production ~3.5M tons vs. apparent consumption ~5M tons and permanent curtailments of ~1.2M tons), expects working‑capital release as conditions normalize but cannot quantify it, and reiterated capital returns (Q1 $19.4M special dividend and $745k buybacks ~24k shares); macro indicators cited include ABI 45.3 (13th month <50), DMI +7% in December and >50% YoY (commercial +45%), while US construction spending was down ~1.6% YTD and US cement shipments were down 4.3% in August.Insteel Industries Financial Statement Overview
Summary
Profitability and modest TTM revenue growth are improving (Income Statement score 72) and the balance sheet is a major strength with essentially no debt (Balance Sheet score 91). However, TTM cash generation is a key concern (Cash Flow score 38) with near-breakeven free cash flow and weaker cash conversion versus earnings, which meaningfully reduces confidence in near-term quality of results.Income Statement
TTM (Trailing-Twelve-Months) revenue is up ~4.7% with solid profitability (about 15.0% gross margin and 7.0% net margin), improving versus the 2024 annual period. However, results appear cyclical: revenues declined in 2023 and 2024 after the very strong 2022 year, and margins remain well below the 2021–2022 peak levels, indicating sensitivity to pricing/spreads and end-market demand.72
Positive
Balance Sheet
The balance sheet is a clear strength: essentially no leverage (TTM total debt at $0; annual periods show minimal debt and very low debt-to-equity). Equity is sizable ($358.8M TTM) and profitability on equity is healthy (~11.7% TTM), improving from 2024, which provides resilience through industry downturns. The primary trade-off is that low leverage can limit financial flexibility benefits (e.g., optimizing cost of capital), but overall solvency risk is very low.91
Very Positive
Cash Flow
Cash generation is the main weak spot in TTM (Trailing-Twelve-Months): operating cash flow is $7.5M and free cash flow is near breakeven ($0.4M), a sharp deterioration from the 2025 annual period ($27.2M operating; $19.0M free cash flow). Cash flow also trails earnings, suggesting working-capital drag and/or elevated reinvestment needs in the most recent period. While prior years show the business can produce strong cash (notably 2023 and 2024), the recent drop raises near-term quality-of-earnings and liquidity optics.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 647.71M | 529.20M | 649.19M | 826.83M | 590.60M |
| Gross Profit | 93.44M | 49.63M | 65.40M | 197.31M | 121.55M |
| EBITDA | 72.25M | 40.79M | 55.15M | 176.30M | 100.72M |
| Net Income | 41.02M | 19.30M | 32.41M | 125.01M | 66.61M |
Balance Sheet | |||||
| Total Assets | 462.65M | 422.55M | 447.51M | 471.75M | 390.71M |
| Cash, Cash Equivalents and Short-Term Investments | 38.63M | 111.54M | 125.67M | 48.32M | 89.88M |
| Total Debt | 3.90M | 1.69M | 1.94M | 1.57M | 1.73M |
| Total Liabilities | 91.12M | 71.70M | 66.01M | 82.00M | 88.67M |
| Stockholders Equity | 371.53M | 350.86M | 381.50M | 389.74M | 302.04M |
Cash Flow | |||||
| Free Cash Flow | 18.95M | 39.06M | 111.50M | -10.23M | 52.38M |
| Operating Cash Flow | 27.16M | 58.21M | 142.20M | 5.67M | 69.88M |
| Investing Cash Flow | -75.67M | -19.64M | -20.90M | -6.04M | -17.80M |
| Financing Cash Flow | -24.40M | -52.70M | -43.95M | -41.20M | -30.88M |
Insteel Industries Technical Analysis
Negative
31.66
Price Trends
32.00
Positive
33.11
Negative
33.91
Negative
Market Momentum
0.16
Positive
45.58
Neutral
48.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIN, the sentiment is Negative. The current price of 31.66 is below the 20-day moving average (MA) of 32.92, below the 50-day MA of 32.00, and below the 200-day MA of 33.91, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 45.58 is Neutral, neither overbought nor oversold. The STOCH value of 48.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IIIN.
Insteel Industries Risk Analysis
Insteel Industries disclosed 17 risk factors in its most recent earnings report. Insteel Industries reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Insteel Industries Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.68B | 11.57 | 27.38% | 0.67% | 1.55% | 701.41% | |
78 Outperform | $635.68M | 18.21 | 9.78% | ― | 7.61% | 25.35% | |
70 Outperform | $2.67B | 25.35 | 11.31% | 1.27% | 7.43% | 148.83% | |
66 Neutral | $622.24M | 13.20 | 13.77% | 3.49% | 22.39% | 112.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $384.63M | 34.20 | 5.06% | ― | -12.38% | -0.71% | |
52 Neutral | $887.12M | -39.64 | -2.81% | 2.84% | -4.89% | -214.50% |
* Industrials Sector Average
IIIN
Insteel Industries
32.88
4.65
16.47%
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RYI
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28.22
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MEC
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19.65
3.57
22.20%
Insteel Industries Corporate Events
Executive/Board Changes
Insteel Industries Announces Board of Directors Changes
Neutral
Nov 14, 2025
On November 10, 2025, Insteel Industries announced changes to its Board of Directors. W. Allen Rogers II will not seek re-election at the 2026 Annual Meeting, and Joseph A. Rutkowski will resign immediately prior to the meeting. These decisions are not due to any disagreements with the company. Consequently, the Board will reduce its size from nine to eight directors following Rutkowski’s resignation and to seven directors after Rogers’ term ends.
The most recent analyst rating on (IIIN) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Insteel Industries stock, see the IIIN Stock Forecast page.
DividendsFinancial Disclosures
Insteel Industries Declares Special Cash Dividend
Positive
Nov 12, 2025
On November 11, 2025, Insteel Industries announced that its Board of Directors declared a regular quarterly cash dividend of $0.03 per share and a special cash dividend of $1.00 per share, both payable on December 12, 2025, to shareholders of record as of November 28, 2025. This decision reflects Insteel’s strong financial performance and disciplined capital management, allowing it to return capital to shareholders while continuing to invest in its business and maintain strategic flexibility.
The most recent analyst rating on (IIIN) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Insteel Industries stock, see the IIIN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.