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Schnitzer Steel Industries (RDUS)
NASDAQ:RDUS
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Schnitzer Steel Industries
(NASDAQ:RDUS)
47Neutral
Schnitzer Steel Industries (RDUS) vs. S&P 500 (SPY)
Market Cap
$393.61M
Dividend Yield5.49%
Average Volume (3M)274.50K
Price to Earnings (P/E)―
Beta (1Y)1.76
Revenue Growth-4.98%
EPS Growth-910.57%
CountryUS
Employees3,011
SectorBasic Materials
Sector Strength63
IndustrySteel
Share Statistics
EPS (TTM)-10.03
Shares Outstanding27,955,383
10 Day Avg. Volume363,124
30 Day Avg. Volume274,497
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.14
Price to Cash Flow (P/CF)-51.70
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
$22.00Price Target Upside-20.89% Downside
Rating ConsensusHold
Number of Analyst Covering0
Schnitzer Steel Industries Business Overview & Revenue Model
Company DescriptionSchnitzer Steel Industries, Inc. engages in recycling of ferrous and nonferrous scrap metal and manufacture of finished steel products. It operates through the Auto and Metals Recycling (AMR) and Cascade Steel and Scrap (CSS) segments. The AMR segment acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors and brokers, and procure salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores. The CSS segment manages a steel mini-mill that produces a range of finished steel long products using ferrous recycled scrap metal and other raw materials. The company was founded by Sam Schnitzer in 1906 and is headquartered in Portland, OR.
How the Company Makes MoneySchnitzer Steel Industries generates revenue primarily through its Auto and Metals Recycling (AMR) and Cascade Steel and Scrap (CSS) segments. The AMR segment collects and processes scrap metal from various sources, including end-of-life vehicles, industrial manufacturers, and demolition projects. This processed scrap metal is then sold to steel mills and foundries for reuse in manufacturing. The CSS segment operates a mini-mill, manufacturing finished steel products such as rebar, wire rod, and other specialty products from recycled scrap metal. Schnitzer Steel's revenue is significantly influenced by the global demand and pricing for recycled metals and finished steel products. Additionally, strategic partnerships with industrial clients and advancements in recycling technologies contribute to optimizing operational efficiency and profitability.
Schnitzer Steel Industries Financial Statement Overview
Summary
The company is experiencing considerable financial challenges, with declining revenues, profitability, and cash flow issues. Although the balance sheet remains stable, the overall financial health is hampered by negative margins and liquidity problems.Income Statement
Schnitzer Steel Industries has experienced a notable decline in revenue and profitability. The gross profit margin remains at 100%, but this is misleading due to negative EBIT and EBITDA margins of -10.75% and -7.22%, respectively, indicating operational challenges. The net profit margin is also negative at -9.73%, reflecting consistent net losses. Revenue growth has declined by 5.0% from the previous year, highlighting a downturn in sales performance.45
Neutral
Balance Sheet
The balance sheet shows a moderate level of risk with a debt-to-equity ratio of 0.86, indicating manageable leverage. However, the return on equity is negative due to net losses, suggesting inefficient use of equity. The equity ratio stands at 40.6%, providing a reasonable equity buffer against liabilities. Overall, the balance sheet portrays stability but lacks strong profitability metrics.50
Neutral
Cash Flow
Cash flow performance is concerning, with a significant decline in free cash flow from the previous year. The operating cash flow to net income ratio is negative, suggesting cash flow challenges in covering net losses. The free cash flow to net income ratio is also negative, further indicating liquidity issues. The cash flow situation requires attention to improve financial flexibility.40
Negative
| Breakdown | |||||
| TTM | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.96B | 2.88B | 3.49B | 2.76B | 1.71B | 173.32M | Gross Profit |
| 298.47M | 307.71M | 488.07M | 453.19M | 208.62M | 157.23M | EBIT |
| -10.60M | -3.92M | 225.91M | 213.73M | 6.85M | -112.23M | EBITDA |
| 33.79M | 38.31M | 226.86M | 214.28M | 21.45M | -106.32M | Net Income Common Stockholders |
| -25.97M | -25.79M | 168.80M | 165.11M | -4.14M | -132.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.54M | 6.03M | 43.80M | 27.82M | 17.89M | 160.90M | Total Assets |
| 1.82B | 1.72B | 1.83B | 1.49B | 1.23B | 219.15M | Total Debt |
| 476.65M | 365.31M | 371.87M | 209.53M | 229.42M | 286.61M | Net Debt |
| 473.11M | 359.28M | 328.07M | 181.72M | 211.53M | 216.72M | Total Liabilities |
| 894.12M | 804.29M | 868.12M | 654.58M | 549.49M | 261.43M | Stockholders Equity |
| 924.74M | 908.18M | 953.98M | 835.76M | 676.71M | -42.28M |
| Cash Flow | Free Cash Flow | ||||
| 93.41M | 9.85M | 87.56M | 71.20M | 42.59M | -82.41M | Operating Cash Flow |
| 200.22M | 139.36M | 237.68M | 190.06M | 124.60M | -82.41M | Investing Cash Flow |
| -95.97M | -143.97M | -316.15M | -117.65M | -78.86M | 87.28M | Financing Cash Flow |
| -103.45M | -33.13M | 94.57M | -62.82M | -40.50M | 5.71M |
Schnitzer Steel Industries Technical Analysis
Positive
27.81
Price Trends
13.18
Positive
15.39
Positive
15.57
Positive
Market Momentum
1.29
Negative
87.76
Negative
82.95
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDUS, the sentiment is Positive. The current price of 27.81 is above the 20-day moving average (MA) of 14.12, above the 50-day MA of 13.18, and above the 200-day MA of 15.57, indicating a bullish trend. The MACD of 1.29 indicates Negative momentum. The RSI at 87.76 is Negative, neither overbought nor oversold. The STOCH value of 82.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RDUS.
Schnitzer Steel Industries Risk Analysis
Schnitzer Steel Industries disclosed 30 risk factors in its most recent earnings report. Schnitzer Steel Industries 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
Schnitzer Steel Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $14.71B | 17.68 | 11.71% | 1.58% | -6.56% | -31.89% | |
72 Outperform | $30.45B | 15.31 | 9.79% | 1.67% | -11.46% | -53.33% | |
72 Outperform | $18.55B | 12.55 | 17.27% | 1.49% | -6.68% | -32.96% | |
60 Neutral | $5.04B | 39.99 | 3.24% | 1.62% | -8.66% | -82.83% | |
49 Neutral | $8.78B | 24.01 | 3.43% | 0.53% | -13.48% | -56.94% | |
47 Neutral | $393.61M | ― | -39.08% | 5.49% | -4.98% | -910.57% | |
47 Neutral | $2.64B | -3.98 | -26.97% | 3.35% | 2.55% | -29.66% |
* Basic Materials Sector Average
Performance Comparison
RDUS
Schnitzer Steel Industries
27.81
9.36
50.73%
CMC
Commercial Metals Company
46.34
-6.88
-12.93%
NUE
Nucor
132.09
-53.65
-28.88%
RS
Reliance Steel
282.78
-33.00
-10.45%
STLD
Steel Dynamics
127.14
-8.76
-6.45%
X
United States Steel
39.00
0.35
0.91%
Schnitzer Steel Industries Earnings Call Summary
Earnings Call Date: Jan 7, 2025 | % Change Since: 91.27% | Next Earnings Date: Apr 3, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong safety performance, improvements in recycled metals business, and sustainability achievements being notable highlights. However, these were countered by financial challenges such as tax detriments, declines in finished steel contribution, and pressures from the U.S. manufacturing sector and Chinese steel exports. The company is hopeful about future improvements due to strategic initiatives and anticipated market recovery.Highlights
Strong Safety Performance
Achieved a 50% sequential reduction in total case incident rate, with 97% of sites experiencing 0 lost time injuries.
Recycled Metals Business Improvement
Contribution from recycled metals improved, driven by cost reduction, productivity measures, and strong nonferrous demand.
Advanced Metal Recovery Technologies
Investments in advanced metal recovery technologies expected to generate over $40 million in annual EBITDA after full deployment.
Sustainability Achievements
Reduced Scope 1 and 2 emissions by 30% versus 2019 baseline and maintained 100% net carbon-free electricity usage.
Cost Reduction and Productivity Program
Achieved a 6% reduction in adjusted SG&A costs compared to the prior year.
Lowlights
Deferred Tax Detriment
Adjusted EPS loss of $1.33 primarily due to an income tax detriment associated with deferred tax assets.
Finished Steel Contribution Decline
Finished steel contribution declined year-over-year due to weaker demand, 10% compression in metal spreads, and higher conversion costs.
Pressure on U.S. Manufacturing Sector
U.S. manufacturing sector in recessionary territory for two years, negatively impacting performance.
Elevated Chinese Steel Exports
Chinese steel exports increased by 25% year-over-year, affecting global steel demand and ferrous scrap demand.
Interest Expense Increase
Interest expense rose by $4 million year-over-year due to recent amendment to the credit facility.
Company Guidance
During the Radius Recycling Q1 2025 earnings call, the company provided guidance on several key metrics and strategic initiatives. The adjusted EPS loss was reported at $1.33, primarily due to an income tax detriment linked to deferred tax assets. Despite challenging market conditions, the recycled metals business showed improvement, driven by cost reduction measures and stronger nonferrous demand. Steel mill utilization was at 81%, higher than the U.S. average of 75%, despite a decline in finished steel contribution due to weaker domestic conditions. The company achieved nearly breakeven operating cash flow and continued its streak of 123 consecutive quarterly dividends. Capital expenditures for fiscal 2025 are projected to be around $60 million, with net debt standing at $430 million. Strategic priorities include investments in metal recovery technologies expected to yield over $40 million in annual EBITDA, expansion of 3PR services, and cost reduction efforts that reduced adjusted SG&A expenses by 6% year-over-year. Additionally, the company anticipates a significant ramp-up in returns from these technology investments by Q3 of fiscal 2025.Schnitzer Steel Industries Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Schnitzer Steel Industries Appoints New COO for Growth
Positive
Nov 8, 2024
Radius Recycling, Inc. has appointed Marc Hathhorn as Executive Vice President and Chief Operating Officer, bringing over 30 years of leadership in the mining industry. Previously with Peabody Energy, Hathhorn’s track record includes achieving operational excellence and implementing cost-effective strategies. His role will support Radius’s strategic goals, such as advancing metal recovery technologies and expanding recycling services. This leadership change aligns with Radius’s efforts to capitalize on global manufacturing growth and infrastructure investments.
Executive/Board Changes
Schnitzer Steel Announces Board Member Resignation
Neutral
Nov 6, 2024
Michael W. Sutherlin has resigned from the Board of Directors of Radius Recycling, Inc. due to personal reasons, not due to any disagreements with the company. His departure leaves the board with seven members, maintaining the same number as before the recent addition of independent member Mauro Gregorio.
Executive/Board ChangesBusiness Operations and Strategy
Schnitzer Steel Expands Board with Industry Veteran
Positive
Oct 24, 2024
Radius Recycling, Inc. has expanded its board of directors by appointing Mauro Gregorio, a seasoned executive with a 40-year career at Dow Inc., as a new independent director. Known for his expertise in global commodities markets and performance optimization, Gregorio’s addition is anticipated to bolster the company’s strategic growth, particularly in the recycled metal products sector. This move aligns with Radius’ objectives to meet the increasing demand for its services globally.
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.