Insteel Industries (IIIN) AI Stock Analysis

• Market Cap: $519.77M
• Dividend Yield: 0.35%
• Average Volume (3M): 183.11K
• Price to Earnings (P/E): 27.2
• Beta (1Y): 1.49
• Revenue Growth: -0.33%
• EPS Growth: -7.06%
• Country: US
• Employees: 929
• Sector: Industrials
• Sector Strength: 78
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 0.06
• Shares Outstanding: 19,430,632
• 10 Day Avg. Volume: 206,385
• 30 Day Avg. Volume: 183,109
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.99
• Price to Cash Flow (P/CF): 7.00
• P/FCF Ratio: 7.00
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 10.17
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $39.00
• Price Target Upside: 15.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Insteel Industries demonstrates solid financial health with strong earnings growth and effective cash flow management, supported by a robust balance sheet. However, revenue volatility and moderate profitability margins suggest room for improvement. The stock shows bullish technical indicators but may be overvalued, with a high P/E ratio and low dividend yield. The recent earnings call and board appointment highlight strategic strengths, but macroeconomic and supply chain challenges remain.

Insteel Industries Business Overview & Revenue Model

Company Description

Insteel Industries, Inc. is a leading manufacturer of steel wire reinforcing products for concrete construction applications. Headquartered in Mount Airy, North Carolina, the company specializes in the production of prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. These products are primarily used in nonresidential and infrastructure construction projects across the United States.

How the Company Makes Money

Insteel Industries generates revenue primarily through the sale of its steel wire reinforcing products, including prestressed concrete strand and welded wire reinforcement. The company sells its products to a range of customers, including manufacturers of concrete products, distributors, and construction contractors involved in nonresidential, infrastructure, and residential construction projects. Key revenue streams include direct sales contracts, distribution agreements, and potentially long-term supply agreements with large infrastructure and construction firms. The company's earnings are significantly influenced by the demand in the construction industry, raw material costs, and its ability to efficiently manage production and distribution operations.

Insteel Industries Financial Statement Overview

Summary

Insteel Industries shows a satisfactory financial position with stable operational efficiency and a strong balance sheet. Revenue volatility and moderate profitability margins suggest areas for improvement. The low leverage and high equity ratio highlight financial stability.

Income Statement

Insteel Industries has demonstrated a moderate performance in its income statement metrics. The TTM gross profit margin stands at 10.82%, showing a slight improvement from previous years. The net profit margin for the TTM is 3.95%, aligning with industry expectations but indicating room for improvement. Revenue growth has been volatile, with a significant decline of 11.66% in 2023, followed by a more stable period. EBIT and EBITDA margins are 4.85% and 6.67%, respectively, suggesting stable operational efficiency. Overall, the company shows satisfactory operational performance with potential for further profitability improvements.

Balance Sheet

The balance sheet reflects strong financial health with a low debt-to-equity ratio of 0.01, indicating minimal leverage and financial risk. Return on Equity (ROE) is relatively low at 6.6% for the TTM, suggesting moderate profitability. The equity ratio of 80.92% shows a solid capital structure with a high proportion of assets funded by equity. The company's strong equity position and low debt levels provide significant financial stability.

Cash Flow

Cash flow analysis reveals mixed results. The free cash flow growth rate was positive at 4.56% in the TTM, showing resilience in generating cash. However, the operating cash flow to net income ratio of 2.25 indicates strong cash generation relative to accounting profits. The free cash flow to net income ratio of 1.81 further underlines robust cash flow management. Despite these strengths, fluctuations in cash flow from operations suggest potential volatility.

Breakdown
Sep 2024	Sep 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
529.20M	649.19M	826.83M	590.60M	472.62M
	Gross Profit
49.63M	65.40M	197.31M	121.55M	55.79M
	EBIT
20.04M	34.71M	161.50M	89.07M	26.17M
	EBITDA
40.79M	55.15M	176.30M	100.72M	38.53M
	Net Income Common Stockholders
19.30M	32.41M	125.01M	66.61M	19.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
111.54M	125.67M	48.32M	89.88M	68.69M
	Total Assets
422.55M	447.51M	471.75M	390.71M	337.90M
	Total Debt
1.69M	1.94M	1.57M	1.73M	2.53M
	Net Debt
-109.85M	-123.73M	-46.75M	-88.16M	-66.16M
	Total Liabilities
71.70M	66.01M	82.00M	88.67M	73.10M
	Stockholders Equity
350.86M	381.50M	389.74M	302.04M	264.80M
Cash Flow		Free Cash Flow
39.06M	111.50M	-10.23M	52.38M	49.11M
	Operating Cash Flow
58.21M	142.20M	5.67M	69.88M	56.22M
	Investing Cash Flow
-19.64M	-20.90M	-6.04M	-17.80M	-23.17M
	Financing Cash Flow
-52.70M	-43.95M	-41.20M	-30.88M	-2.54M

Insteel Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIN, the sentiment is Positive. The current price of 33.81 is above the 20-day moving average (MA) of 29.08, above the 50-day MA of 28.13, and above the 200-day MA of 28.98, indicating a bullish trend. The MACD of 1.86 indicates Negative momentum. The RSI at 74.69 is Negative, neither overbought nor oversold. The STOCH value of 95.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IIIN.

Insteel Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MLI	75 Outperform	$8.13B	13.39	24.51%	1.16%	18.81%	10.05%
IIIN	72 Outperform	$519.77M	27.20	6.61%	0.35%	-0.33%	-7.06%
NWPX	67 Neutral	$393.66M	11.68	9.58%	―	10.81%	63.68%
WOR	66 Neutral	$2.55B	42.77	6.56%	1.32%	-69.82%	-78.10%
Sector *	63 Neutral	$4.21B	11.55	5.28%	250.72%	4.13%	-9.42%
MEC	61 Neutral	$268.52M	10.65	10.78%	―	-1.16%	227.49%
RYI	56 Neutral	$641.02M	37.86	-1.00%	3.21%	-9.98%	-106.51%

Insteel Industries Corporate Events

Insteel Industries Expands Board with New Appointment

On February 28, 2025, Insteel Industries Inc. announced the appointment of Eric J. Zernikow to its board of directors, expanding the board to nine members. Mr. Zernikow, with extensive experience at Nucor Corporation, will serve on the Executive Compensation and Nominating and Governance Committees. His appointment is expected to enhance the board’s commercial and operational expertise, potentially benefiting Insteel’s strategic direction and stakeholder interests.

Insteel Industries Approves 2025 Equity Incentive Plan

Insteel Industries Inc. held its Annual Meeting of Shareholders on February 11, 2025, where the company’s stockholders approved the 2025 Equity Incentive Plan designed to align the interests of participants with those of the company and its shareholders. The plan includes various stock-based awards and is effective until February 10, 2035. Additionally, the meeting included the election of directors, advisory approval of executive compensation, and the ratification of Grant Thornton LLP as the independent registered public accounting firm.