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Sims (SMSMY)
OTHER OTC:SMSMY
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Sims
(OTC:SMSMY)
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Rating:61Neutral
Price Target:
$14.00
▲(12.72% Upside)
Sims Limited's overall stock score reflects a significant turnaround in earnings, driven by strategic shifts and cost reductions. However, profitability challenges and valuation concerns weigh on the score. Technical indicators show strong momentum, but overbought conditions suggest caution. The earnings call provided positive guidance, supporting a more optimistic outlook.
Positive Factors
Revenue Growth
The positive revenue growth rate indicates recovery and suggests the company's ability to capture market opportunities and expand its operations, which is crucial for long-term sustainability.
Strategic Shifts
Strategic shifts focusing on margin over volume and supply chain optimization have led to improved profitability, positioning the company for sustained growth.
Nonferrous Market Strength
The strong performance in nonferrous trading reflects robust demand and enhances revenue diversification, reducing reliance on more volatile ferrous markets.
Negative Factors
Profitability Challenges
Ongoing profitability challenges, as indicated by negative margins, highlight inefficiencies and cost management issues that could hinder long-term financial health.
Cash Flow Management
Weak cash flow management, with declining free cash flow, limits the company's ability to invest in growth opportunities and manage debt effectively, impacting financial flexibility.
Increased Gearing and Leverage
Higher debt levels and increased leverage can strain the company's financial stability and limit its ability to respond to market changes or invest in strategic initiatives.
Sims (SMSMY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.54B
Dividend Yield1.08%
Average Volume (3M)81.00
Price to Earnings (P/E)―
Beta (1Y)1.14
Revenue Growth2.78%
EPS Growth72.91%
CountryUS
Employees3,887
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.16
Shares Outstanding193,231,460
10 Day Avg. Volume0
30 Day Avg. Volume81
Financial Highlights & Ratios
PEG Ratio2.27
Price to Book (P/B)1.12
Price to Sales (P/S)0.39
P/FCF Ratio28.08
Enterprise Value/Market Cap1.38
Enterprise Value/Revenue0.47
Enterprise Value/Gross Profit3.53
Enterprise Value/Ebitda19.79
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
Sims Business Overview & Revenue Model
Company DescriptionSims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminum, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, such as information technology assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, including electrical and electronic equipment. In addition, it provides secondary processing and other services comprising recycling of municipal curbside materials, stevedoring, and other sources of service. Sims Limited was founded in 1917 and is headquartered in Mascot, Australia.
How the Company Makes MoneySims generates revenue primarily through the sale of recycled materials, including ferrous and non-ferrous metals, as well as processed electronic waste. The company operates a revenue model based on the collection and processing of scrap materials, which are then sold to manufacturers and other industries for reuse in production. Key revenue streams include the direct sale of recycled metals, fees for e-waste recycling services, and partnerships with local governments and businesses for waste management solutions. Additionally, Sims may benefit from fluctuations in commodity prices for metals, which can significantly impact earnings. Strategic partnerships and contracts with industries looking to enhance their sustainability efforts further contribute to the company's revenue.
Sims Earnings Call Summary
Earnings Call Date:Aug 18, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 16, 2026
Earnings Call Sentiment Positive
The earnings call highlighted a significant turnaround in financial performance, driven by strategic shifts and cost reductions, despite facing challenging market conditions, particularly in the ferrous segment. Strong performance in nonferrous trading and SLS business growth were key positives, while weather disruptions and credit issues in the U.K. were notable challenges.Q4-2025 Updates
Positive Updates
Significant Turnaround in Earnings
FY '25 saw a nearly 50% increase in underlying EBITDA to $430 million and a near 200% increase in underlying EBIT to $174.9 million, despite a drop in sales volumes.
Improved Safety and Employee Engagement
Continued strong performance in safety metrics and maintained a high employee engagement score through challenging market conditions.
Strong Nonferrous Performance
Nonferrous trading accounted for 34% of group revenue, up 7 percentage points from the previous year, driven by robust demand.
Successful Cost Reduction Efforts
Achieved $35 million in labor cost savings and reduced corporate costs by ceasing development of the plasma gasification technology.
SLS Business Growth
SLS contributed 20% of underlying EBIT, with significant growth in the number of repurposed units and strong demand driven by AI.
Strategic Domestic Market Growth
Shift to more domestic sales in North America, capturing U.S. domestic premiums and reducing export-related risks.
Negative Updates
Challenging Ferrous Market Conditions
Ferrous margins in ANZ were pressured by weak global prices and overproduction from China, impacting domestic scrap prices.
Weather-Related Disruptions
Severe weather in North America during January and February affected intake levels, impacting performance in the third quarter.
Credit Loss on U.K. Metal Receivable
Took an accounting requirement to consider potential credit loss on the balance of the U.K. metal receivable due to deferred payment.
Increased Gearing and Leverage
Net debt increased to $332 million, with gearing and leverage metrics outside of preferred range, partly due to working capital changes.
Company Guidance
In the Sims Limited FY '25 results call, the company reported a significant turnaround, with a nearly 50% increase in underlying EBITDA to $430 million and a 200% rise in underlying EBIT to $174.9 million, despite a drop in sales volumes. This improvement was attributed to strategic priorities such as focusing on margin over volume, optimizing the supply chain, and enhancing customer relationships. The Metal division saw increased shredder utilization and trading margins, while SLS's growth in repurposed units drove higher revenue and EBIT margins. The company's safety performance reached historic lows, and employee engagement remained high. Looking ahead to FY '26, Sims anticipates continued strength in nonferrous demand and benefits from AI-driven memory needs, despite ongoing challenges from China's steel output and global scrap market volatility.Sims Financial Statement Overview
Summary
Sims has shown mixed financial performance. While revenue growth is positive, profitability remains a concern with negative net margins and returns on equity. The balance sheet is stable with manageable debt, but cash flow management needs improvement.Income Statement
Sims has shown a mixed performance in its income statement. The revenue growth rate of 10.87% in the latest period is a positive sign, indicating recovery from previous declines. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -0.25% and an EBIT margin of 1.20%. The gross profit margin is relatively healthy at 28.67%, but the negative net income highlights ongoing challenges in cost management and operational efficiency.55
Neutral
Balance Sheet
The balance sheet reflects moderate financial stability. The debt-to-equity ratio of 0.30 indicates a manageable level of leverage, which is a positive aspect. However, the return on equity is negative at -0.73%, suggesting inefficiencies in generating returns for shareholders. The equity ratio stands at 58.19%, showing a solid equity base relative to total assets, which provides some financial cushion.60
Neutral
Cash Flow
Cash flow analysis reveals some concerns, particularly with a significant decline in free cash flow growth at -57.7%. The operating cash flow to net income ratio of 0.31 indicates that cash generation from operations is not fully covering net losses. The free cash flow to net income ratio is 0.35, which shows some ability to generate cash relative to net income, but overall cash flow management needs improvement.50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.51B | 7.49B | 7.20B | 8.08B | 9.28B | 5.93B |
| Gross Profit | 989.80M | 2.15B | 1.04B | 844.30M | 1.15B | 852.20M |
| EBITDA | 176.50M | 345.10M | 381.00M | 523.00M | 491.90M | 230.60M |
| Net Income | -19.00M | -19.00M | -57.80M | 181.10M | 599.30M | 229.40M |
Balance Sheet | ||||||
| Total Assets | 4.45B | 4.45B | 4.90B | 4.71B | 4.44B | 3.68B |
| Cash, Cash Equivalents and Short-Term Investments | 215.60M | 215.60M | 280.80M | 329.80M | 267.50M | 254.10M |
| Total Debt | 787.70M | 787.70M | 784.40M | 804.80M | 701.70M | 557.10M |
| Total Liabilities | 1.86B | 1.86B | 2.34B | 2.05B | 1.90B | 1.56B |
| Stockholders Equity | 2.59B | 2.59B | 2.56B | 2.66B | 2.54B | 2.12B |
Cash Flow | ||||||
| Free Cash Flow | 103.00M | 103.00M | -12.10M | 218.70M | 273.10M | 800.00K |
| Operating Cash Flow | 297.10M | 297.10M | 202.50M | 449.20M | 547.80M | 129.40M |
| Investing Cash Flow | -64.50M | -64.50M | -344.50M | -245.20M | -274.80M | -126.90M |
| Financing Cash Flow | -142.40M | -142.40M | -75.50M | -155.00M | -259.70M | 10.40M |
Sims Technical Analysis
Positive
12.42
Price Trends
11.51
Positive
10.35
Positive
10.02
Positive
Market Momentum
0.47
Negative
78.14
Negative
100.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMSMY, the sentiment is Positive. The current price of 12.42 is above the 20-day moving average (MA) of 12.41, above the 50-day MA of 11.51, and above the 200-day MA of 10.02, indicating a bullish trend. The MACD of 0.47 indicates Negative momentum. The RSI at 78.14 is Negative, neither overbought nor oversold. The STOCH value of 100.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMSMY.
Sims Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.97B | 15.69 | 11.71% | 1.78% | -0.75% | -13.51% | |
73 Outperform | $5.05B | 26.25 | 5.84% | ― | -16.81% | -67.68% | |
63 Neutral | $571.98M | 43.25 | 2.40% | 1.42% | -5.64% | -48.34% | |
62 Neutral | $865.88M | -99.00 | -1.18% | ― | -3.42% | -134.99% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $2.54B | -248.30 | 0.14% | 1.08% | 2.78% | 72.91% | |
54 Neutral | $2.44B | -8.83 | -10.50% | ― | -5.79% | -5.30% |
* Basic Materials Sector Average
SMSMY
Sims
13.41
5.20
63.43%
SIM
Grupo Simec SA De CV
30.92
4.92
18.92%
SID
Companhia Siderúrgica Nacional
1.79
0.40
28.78%
ZEUS
Olympic Steel
48.97
15.89
48.03%
MTUS
Metallus
19.87
4.68
30.81%
WS
Worthington Steel, Inc.
40.06
9.65
31.73%
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.