Reliance Steel (RS) AI Stock Analysis

• Market Cap: $15.63B
• Dividend Yield: 1.51%
• Average Volume (3M): 456.29K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.87
• Revenue Growth: -5.60%
• EPS Growth: -35.05%
• Country: US
• Employees: 15,900
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Steel
• EPS (TTM): 13.95
• Shares Outstanding: 52,588,104
• 10 Day Avg. Volume: 306,475
• 30 Day Avg. Volume: 456,287
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.22
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $324.00
• Price Target Upside: 9.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Reliance Steel's overall stock score reflects a robust financial position supported by operational efficiencies and strong technical indicators. While valuation is moderate, the company's strategic achievements and positive earnings call outlook bolster the overall score.

Positive Factors

Financial Health

Reliance's healthy balance sheet and free cash flow should continue to support a balanced capital allocation, investing in growth and shareholder returns.

Market Position

Reliance's diversified product and end market mix, value-added processing capabilities, and predominantly domestic sourcing position it well to deliver resilient results through-cycle.

Negative Factors

Earnings

RS reported Q4 adjusted EPS of $2.22, below its $2.65-2.85 guide, and Bloomberg / VA consensus at $2.74 and BofAe at $2.72.

End Markets

A challenged year is expected for key end markets, including construction.

Reliance Steel Business Overview & Revenue Model

Company Description

Reliance Steel & Aluminum Co. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It also distributes non-ferrous metals products and tubular building products; and manufactures specialty extruded metals, fabricated parts, and welded components. As of December 31, 2021, the company operated a network of approximately 315 locations in 40 states in the United States and 13 in other countries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was founded in 1939 and is headquartered in Los Angeles, California.

How the Company Makes Money

Reliance Steel makes money primarily through the distribution and processing of metal products. The company buys metal from primary metal producers and adds value through cutting, leveling, sawing, and other specialized processing services that meet specific customer requirements. This value-added processing allows Reliance Steel to sell its metal products at a premium compared to raw metal prices. Additionally, the company benefits from a broad and diverse customer base across multiple industries, minimizing reliance on any single market segment. Reliance Steel also engages in strategic acquisitions to expand its geographic footprint and enhance its product offerings, further contributing to its revenue streams.

Reliance Steel Financial Statement Overview

Summary

Reliance Steel maintains a strong financial position with solid profitability and effective leverage management. Despite facing challenges in revenue growth, the company compensates with efficient operations and robust cash flow management.

Income Statement

Reliance Steel demonstrates a strong financial performance with a solid EBIT margin of 7.61% and EBITDA margin of 9.61% in the TTM period. However, revenue has declined from previous years, indicating challenges in maintaining growth. The net profit margin is healthy at 5.65%, reflecting good cost management despite revenue pressures.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.25, indicating prudent leverage management. The equity ratio is high at 68.52%, suggesting strong financial stability. Return on Equity (ROE) stands at 10.87%, showcasing efficient use of shareholders' capital.

Cash Flow

Cash flow from operations remains strong, with an operating cash flow to net income ratio of 1.77, indicating effective cash generation. However, free cash flow growth is negative due to reduced cash reserves, impacting flexibility in capital deployment.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.84B	14.81B	17.02B	14.09B	8.81B
	Gross Profit
13.84B	4.30B	5.25B	4.49B	2.78B
	EBIT
1.16B	1.74B	2.51B	1.95B	565.80M
	EBITDA
1.45B	2.03B	2.76B	2.20B	928.70M
	Net Income Common Stockholders
875.20M	1.34B	1.84B	1.41B	369.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
318.10M	1.08B	1.17B	300.50M	683.50M
	Total Assets
10.02B	10.48B	10.33B	9.54B	8.11B
	Total Debt
1.42B	1.38B	1.87B	1.87B	1.85B
	Net Debt
1.10B	297.10M	691.90M	1.57B	1.17B
	Total Liabilities
2.79B	2.75B	3.23B	3.44B	2.98B
	Stockholders Equity
7.22B	7.72B	7.09B	6.09B	5.12B
Cash Flow		Free Cash Flow
999.20M	1.20B	1.78B	562.80M	1.00B
	Operating Cash Flow
1.43B	1.67B	2.12B	799.40M	1.17B
	Investing Cash Flow
-803.70M	-483.90M	-348.50M	-652.30M	-188.40M
	Financing Cash Flow
-1.38B	-1.28B	-892.60M	-528.90M	-483.00M

Reliance Steel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 297.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RS, the sentiment is Positive. The current price of 297.22 is above the 20-day moving average (MA) of 279.55, above the 50-day MA of 283.90, and above the 200-day MA of 287.24, indicating a bullish trend. The MACD of 2.51 indicates Negative momentum. The RSI at 64.30 is Neutral, neither overbought nor oversold. The STOCH value of 89.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RS.

Reliance Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RS	78 Outperform	$15.63B	21.31	10.27%	1.51%	-5.60%	-35.05%
MT	73 Outperform	$25.14B	18.03	2.60%	1.39%	-8.56%	68.36%
NUE	73 Outperform	$25.57B	13.10	6.54%	1.77%	-10.88%	-66.97%
STLD	73 Outperform	$20.23B	17.84	13.08%	1.39%	-7.42%	-48.08%
PKX	71 Outperform	$13.17B	23.04	1.71%	3.50%	-9.88%	-46.96%
X	64 Neutral	$9.97B	28.18	0.86%	0.45%	-13.48%	-56.94%
Sector *	49 Neutral	$1.95B	-1.37	-21.20%	3.73%	0.84%	-29.84%

Reliance Steel Corporate Events

Reliance Steel Announces Board Member Retirement Plan

Reliance Steel announced that Mark V. Kaminski, a longstanding board member since 2004, will not stand for reelection at the 2025 Annual Meeting of Stockholders. Kaminski’s retirement is voluntary and not due to any disagreements with the company’s operations or policies, and he will continue to serve as a director until the meeting.