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Algoma Steel Group (TSE:ASTL)
TSX:ASTL
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Algoma Steel Group
(TSX:ASTL)
47Neutral
Positive Factors
Production Milestone
Despite some weather-related challenges, Algoma still expects to produce first steel by the end of CY1Q'25.
Project Liquidity
Algoma's liquidity is sufficient to complete the project despite the currently weak steel environment.
Negative Factors
Earnings Outlook
Lackluster contract prices and stagnant recovery in spot sheet prices are expected to lead to soft earnings.
Algoma Steel Group (ASTL) vs. S&P 500 (SPY)
Market Cap
$711.99M
Dividend Yield4.51%
Average Volume (3M)210.09K
Price to Earnings (P/E)―
Beta (1Y)1.22
Revenue GrowthN/A
EPS GrowthN/A
CountryCA
Employees2,818
SectorBasic Materials
Sector Strength52
IndustrySteel
Share Statistics
EPS (TTM)-2.10
Shares Outstanding104,858,800
10 Day Avg. Volume239,678
30 Day Avg. Volume210,089
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.37
Price to Cash Flow (P/CF)-3.00
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
C$13.73Price Target Upside98.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Algoma Steel Group Business Overview & Revenue Model
Company DescriptionAlgoma Steel Group Inc. produces and sells steel products primarily in North America. It provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.
How the Company Makes MoneyAlgoma Steel Group makes money primarily through the production and sale of steel products, including hot and cold rolled steel sheets and plates. The company's revenue streams are largely driven by its ability to cater to various industries, such as automotive, construction, and energy, which require steel for manufacturing and infrastructure development. Algoma Steel may also engage in strategic partnerships and contracts with key clients, ensuring a stable demand for its products. Additionally, the company invests in technological advancements and operational efficiencies to optimize production costs and enhance profit margins. These factors, combined with a focus on sustainability, help Algoma Steel Group maintain a competitive edge in the steel market.
Algoma Steel Group Financial Statement Overview
Summary
Algoma Steel Group faces significant financial headwinds. The income statement shows declining revenue and profitability, the balance sheet indicates increased leverage, and cash flow statements highlight liquidity pressures. To improve its financial standing, the company must focus on enhancing operational efficiency, managing debt levels, and boosting cash flow generation.Income Statement
Algoma Steel Group's income statement highlights significant challenges in profitability. The TTM (Trailing-Twelve-Months) data shows a gross loss and a negative net income, signaling financial difficulties. The revenue decline compared to the previous year further exacerbates concerns. While the company has experienced periods of profit in past years, the current trajectory raises red flags regarding its ability to generate sustainable profits.45
Neutral
Balance Sheet
The balance sheet reflects a moderate level of stability. The debt-to-equity ratio has increased, indicating higher leverage, but it remains at a manageable level. The equity ratio is stable, reflecting a balanced asset structure. However, the declining stockholders' equity and increased total debt suggest potential strains on financial flexibility. The company needs to carefully manage its liabilities to maintain financial health.50
Neutral
Cash Flow
Cash flow analysis reveals challenges in generating free cash flow, with negative figures in the TTM period. Operating cash flow has declined, and the free cash flow growth rate is negative, indicating pressure on liquidity. While there have been periods of positive operating cash flow, the current situation requires attention to improve cash generation and financial sustainability.40
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.49B | 2.80B | 2.78B | 3.81B | 1.79B | 1.96B | Gross Profit |
| -6.90M | 282.30M | 389.80M | 1.51B | 157.20M | -80.10M | EBIT |
| -133.20M | 167.30M | 290.50M | 1.41B | 84.80M | -137.00M | EBITDA |
| -2.80M | 281.70M | 489.30M | 1.29B | 171.90M | 11.70M | Net Income Common Stockholders |
| -157.30M | 105.20M | 298.50M | 857.70M | -76.10M | -175.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 22.00M | 97.90M | 247.40M | 915.30M | 21.20M | 265.00M | Total Assets |
| 1.98B | 2.68B | 2.46B | 2.69B | 1.55B | 1.83B | Total Debt |
| 0.00 | 146.10M | 122.30M | 96.20M | 629.40M | 813.10M | Net Debt |
| -22.00M | 48.20M | -125.10M | -819.10M | 608.20M | 548.10M | Total Liabilities |
| 2.30B | 1.17B | 993.40M | 1.11B | 1.38B | 1.53B | Stockholders Equity |
| -324.10M | 1.50B | 1.46B | 1.58B | 173.80M | 299.90M |
| Cash Flow | Free Cash Flow | ||||
| -291.36M | -195.50M | -156.20M | 1.10B | -63.70M | -118.60M | Operating Cash Flow |
| 110.14M | 294.60M | 177.30M | 1.26B | 8.10M | -4.70M | Investing Cash Flow |
| -373.60M | -490.10M | -333.50M | -165.70M | -72.90M | -115.10M | Financing Cash Flow |
| 505.53M | 44.70M | -569.60M | -198.70M | -167.40M | 246.70M |
Algoma Steel Group Technical Analysis
Negative
6.93
Price Trends
9.68
Negative
11.64
Negative
12.21
Negative
Market Momentum
-0.63
Positive
29.50
Positive
6.40
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ASTL, the sentiment is Negative. The current price of 6.93 is below the 20-day moving average (MA) of 8.17, below the 50-day MA of 9.68, and below the 200-day MA of 12.21, indicating a bearish trend. The MACD of -0.63 indicates Positive momentum. The RSI at 29.50 is Positive, neither overbought nor oversold. The STOCH value of 6.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ASTL.
Algoma Steel Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$1.76B | 10.05 | 26.88% | 11.62% | 3.67% | -6.05% | |
73 Outperform | C$1.08B | 9.61 | 11.27% | 6.61% | -0.27% | -15.99% | |
48 Neutral | C$51.65M | ― | -12.07% | ― | -28.88% | -12.67% | |
47 Neutral | $711.99M | ― | -10.29% | 4.51% | ― | ― | |
47 Neutral | $2.43B | -2.83 | -21.77% | 3.74% | 4.16% | -28.83% |
* Basic Materials Sector Average
Performance Comparison
TSE:ASTL
Algoma Steel Group
6.93
-3.94
-36.27%
TSE:LIF
Labrador Iron Ore
27.50
0.47
1.74%
TSE:MTL
Mullen Group Ltd.
12.67
-1.44
-10.21%
TSE:S
Sherritt International
0.14
-0.22
-61.11%
RUSMF
Russel Metals
25.24
-3.78
-13.03%
Algoma Steel Group Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -16.84% | Next Earnings Date: Jun 19, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company facing significant market challenges and tariff-related uncertainties, but with strong liquidity and strategic advancements such as the nearing completion of the EAF project and opportunities arising from Canadian tariffs on US steel.Highlights
Electric Arc Furnace (EAF) Project Nearing Completion
The EAF project is progressing as planned with first steel production expected in April 2025. The project is expected to be completed within 5% of the upper end of the budget range and marks a significant milestone for Algoma Steel.
Plate Shipments Increase
Plate shipments for Q4 2024 reached approximately 82,000 tons, up from 73,000 tons in Q3 2024, with expectations for further increases in Q1 2025.
Strong Liquidity Position
Algoma Steel maintains a strong balance sheet with over $267 million in cash and total liquidity of $630 million.
Canadian Tariffs on US Steel
The Canadian government announced tariffs on US steel, providing Algoma an opportunity to increase market share, particularly in plate production.
Lowlights
Challenging Market Conditions and Tariff Uncertainty
Global steel markets faced challenges due to tariff uncertainty, US election impacts, and other factors, resulting in lower realized prices and a decline in revenues.
Decline in Steel Revenue and Adjusted EBITDA
Steel revenue for Q4 2024 was $536 million, down 3.8% from the prior year, with adjusted EBITDA showing a loss of $60.3 million.
Cost Increases and Lower Shipments
Cost per ton of steel products sold increased, and shipments for the full year 2024 were 2 million net tons, down from 2.1 million in the prior year.
Impact of Tariffs and Market Uncertainty
The implementation of tariffs on Canadian steel and aluminum imports has introduced uncertainty, impacting the order book and shipment expectations.
Company Guidance
In the recent conference call, Algoma Steel Group Inc. provided comprehensive guidance on their financial and operational metrics. The company reported a balance sheet with $267 million in cash and total liquidity of $630 million, positioning them well to complete their Electric Arc Furnace (EAF) project on schedule. For Q4 2024, Algoma shipped 549,000 tons, a 6.3% increase from the previous year, but faced a decline in net sales realization to $976 per ton. The adjusted EBITDA was a loss of $60.3 million, reflecting challenging market conditions that included tariff uncertainties and higher costs. For the full year 2024, the company achieved steel revenue of $2.2 billion with shipments of 2 million net tons. Looking ahead, Algoma expects Q1 2025 plate production to increase, leveraging its position as Canada's sole discrete plate producer, with an annual run rate capacity target of over 650,000 net tons. EAF project commissioning is progressing, with first steel production anticipated in April 2025. Despite market challenges, Algoma aims to optimize its product mix and enhance operational efficiencies through the EAF transition.Algoma Steel Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Algoma Steel Reports 2024 Financial Results and Reaffirms EAF Project Outlook
Negative
Mar 12, 2025
Algoma Steel Group reported its financial results for the three and nine months ended December 31, 2024, showing a decrease in revenue and increased losses compared to the previous year. Despite these challenges, the company reaffirmed its outlook on the transformative Electric Arc Furnace project, which is expected to see its first arc in April, indicating a strategic shift that could impact its operations and market positioning.
Business Operations and StrategyFinancial Disclosures
Algoma Steel to Release Financial Results and Host Conference Call
Neutral
Feb 27, 2025
Algoma Steel Group Inc. announced it will release its financial results for the three and nine months ended December 31, 2024, on March 12, 2025, following a change in its fiscal year-end. The company will host a webcast and conference call on March 13, 2025, to discuss the results and recent developments. This announcement reflects Algoma’s ongoing efforts to enhance transparency and engage with stakeholders as it continues its transformation journey towards sustainable steel production.
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.