POSCO (PKX) AI Stock Analysis

• Market Cap: $15.10B
• Dividend Yield: 2.03%
• Average Volume (3M): 164.67K
• Price to Earnings (P/E): 43.3
• Beta (1Y): 0.93
• Revenue Growth: -7.63%
• EPS Growth: -63.88%
• Country: US
• Employees: 429
• Sector: Basic Materials
• Sector Strength: 53
• Industry: Steel
• EPS (TTM): 0.36
• Shares Outstanding: 323,731,800
• 10 Day Avg. Volume: 135,101
• 30 Day Avg. Volume: 164,668
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.79
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: <0.01
• Enterprise Value/Ebitda: <0.01
• 1Y Price Target: $36.00
• Price Target Upside: -30.69% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: $63.00 ▲(21.29%Upside)

POSCO's stock score reflects a balance of strong financial stability and positive strategic initiatives against the backdrop of operational challenges and high valuation concerns. The recent earnings call provided positive momentum with improved financial results and strategic plans, but technical indicators suggest caution due to overbought conditions.

POSCO Business Overview & Revenue Model

Company Description

POSCO Holdings Inc., together with its subsidiaries, manufactures and sells steel rolled products and plates in South Korea and internationally. It operates through four segments: Steel, Construction, Trading, and Others. The company offers hot and cold rolled steel, steel plates, wire rods, galvanized sheets, electrical steel, stainless steel, and titanium. It also engages in the design, manufacture, and construction of steel mills and their facilities, and commercial and residential facilities; export and import of raw materials, as well as provision of supply and purchase transactions between domestic and foreign companies, and various steel products; power generation activities; and provision of network, system integration, and logistics services. In addition, the company is involved in the engineering and construction; research and consulting; architectural design and supervision; investment in venture, energy, and technology industries; electronic commerce; intellectual property services and consulting; transporting and warehousing; real estate development, rental, sale, and management; and education and real estate business. Further, it engages in the resource development; mine development; business facility maintenance; fuel cell; iron ore and coal sales; anode reproduction; and cargo handling business, as well as operates housing business agency. Additionally, the company is involved in the IT service and DVR; electric control engineering; forest resources development; refractory materials sales and furnace maintenance; quicklime manufacturing and sales; wastewater treatment operation and maintenance; rice processing; grain sales; and social enterprise businesses. POSCO Holdings Inc. was incorporated in 1968 and is headquartered in Pohang, South Korea.

How the Company Makes Money

POSCO makes money primarily through the production and sale of steel products. The company's revenue model is centered around its extensive portfolio of steel products, which are sold to a diverse customer base across different industries worldwide. Key revenue streams include the sale of hot-rolled and cold-rolled steel, stainless steel, and other specialty steel products. The company also earns income through its engineering and construction services, as well as its energy business, which involves the generation and sale of electricity and other energy-related services. Significant partnerships with global automotive manufacturers, construction firms, and other industrial companies contribute to its earnings by ensuring a steady demand for its steel products. Additionally, POSCO has invested in technological innovations and efficiency improvements, which help maintain its competitive edge in the steel industry.

POSCO Financial Statement Overview

Summary

POSCO's financial performance demonstrates strong equity and manageable debt levels, which provide stability. However, the declining revenue and profit margins signal operational challenges, and cash flow constraints highlight the need for strategic improvements to enhance liquidity and profitability.

Income Statement

POSCO's income statement shows mixed results with a declining revenue trend from 2022 to 2024, decreasing from 84.75 trillion KRW to 72.69 trillion KRW, indicating a negative revenue growth rate. The gross profit margin decreased from 9.02% in 2022 to 7.41% in 2024, and the net profit margin declined from 3.72% in 2022 to 1.51% in 2024, reflecting pressure on profitability. EBIT and EBITDA margins have also decreased, highlighting operational challenges. Despite these declines, the company maintains positive net income and gross profit.

Balance Sheet

The balance sheet of POSCO is strong with a stable equity ratio and a manageable debt-to-equity ratio of 0.49 in 2024. The company has a robust stockholders' equity of 55.39 trillion KRW, providing a solid buffer against liabilities. While total debt has increased slightly over the years, it remains within reasonable limits. The return on equity has decreased from 6.01% in 2022 to 1.98% in 2024, indicating reduced profitability from equity.

Cash Flow

POSCO's cash flow statement reflects challenges with free cash flow consistently negative in 2023 and 2024. The operating cash flow to net income ratio improved slightly to 6.09 in 2024, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio remains negative, suggesting capital expenditure outpaces cash generation. The free cash flow growth rate is negative, highlighting the need for improving cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	72.07T	72.69T	77.06T	84.75T	76.33T	57.79T
Gross Profit	22.16T	5.39T	6.32T	7.65T	11.88T	4.72T
EBITDA	4.20T	6.11T	7.26T	8.53T	12.79T	6.18T
Net Income	856.61B	1.09T	1.70T	3.16T	6.61T	1.58T
Balance Sheet
Total Assets	10.00T>	10.00T>	10.00T>	98.41T	91.47T	79.09T
Cash, Cash Equivalents and Short-Term Investments	15.50T	14.80T	17.91T	18.74T	18.16T	16.46T
Total Debt	0.00	26.90T	25.90T	25.13T	22.52T	20.50T
Total Liabilities	10.00T>	41.95T	41.89T	40.15T	36.67T	31.41T
Stockholders Equity	55.58T	55.39T	54.15T	52.51T	50.43T	44.33T
Cash Flow
Free Cash Flow	-152.99B	-1.01T	-1.06T	766.31B	2.75T	5.19T
Operating Cash Flow	7.09T	6.66T	6.17T	6.19T	6.26T	8.69T
Investing Cash Flow	-5.00T	-4.49T	-7.39T	-4.22T	-5.58T	-6.26T
Financing Cash Flow	-2.35T	-2.30T	-178.59B	1.32T	-768.67B	-1.09T

POSCO Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 51.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PKX, the sentiment is Neutral. The current price of 51.94 is below the 20-day moving average (MA) of 57.12, above the 50-day MA of 51.41, and above the 200-day MA of 49.49, indicating a neutral trend. The MACD of 1.00 indicates Positive momentum. The RSI at 40.16 is Neutral, neither overbought nor oversold. The STOCH value of 6.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PKX.

POSCO Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NUE	76 Outperform	$32.00B	25.03	6.29%	1.58%	-5.78%	-59.98%
PKX	71 Outperform	$15.10B	43.25	0.78%	2.03%	-7.63%	-63.88%
RS	71 Outperform	$14.91B	20.69	9.93%	1.62%	-3.91%	-30.31%
Sector *	71 Outperform	¥175.80B	10.39	6.20%	3.17%	3.62%	-0.47%
STLD	70 Outperform	$18.17B	17.84	11.57%	1.57%	-5.51%	-45.07%
MT	69 Neutral	$25.45B	9.41	4.72%	1.56%	-4.36%	―
X	64 Neutral	$12.42B	186.15	0.86%	0.36%	-14.79%	-88.78%