Algoma Steel Group (ASTL) AI Stock Analysis

• Market Cap: $611.76M
• Dividend Yield: 4.49%
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.42
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 2,818
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): -4.46
• Shares Outstanding: 104,933,800
• 10 Day Avg. Volume: 1,435,079
• 30 Day Avg. Volume: 1,099,421
• PEG Ratio: 0.02
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.62
• P/FCF Ratio: -4.21
• Enterprise Value/Market Cap: 2.08
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: -4.23
• Enterprise Value/Ebitda: -6.94
• 1Y Price Target: $8.50
• Price Target Upside: 36.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: C$6.00 ▼(-3.54% Downside)

Algoma Steel Group's overall stock score reflects significant financial challenges, with negative profitability and declining revenue as major concerns. The company's technical indicators show mixed signals, with short-term bullish momentum but longer-term bearish trends. Valuation is challenging due to a negative P/E ratio, though the dividend yield is relatively high. The earnings call highlights both challenges and positive developments, while recent corporate events provide financial support and strategic leadership for future growth.

Positive Factors

Strong Liquidity Position

A strong liquidity position provides Algoma Steel with the financial flexibility to navigate market challenges and invest in strategic initiatives, supporting long-term stability and growth.

Progress on Electric Arc Furnace Project

The EAF project positions Algoma Steel for improved efficiency and cost reductions, enhancing competitiveness and sustainability in the steel industry.

Government Financing Support

Government-backed financing strengthens Algoma's balance sheet and supports its strategic transformation, providing a stable platform for future growth and diversification.

Negative Factors

Decline in Steel Revenue

A decline in steel revenue suggests challenges in market demand and pricing, potentially impacting long-term revenue growth and profitability.

Adjusted EBITDA Loss

Sustained EBITDA losses indicate operational inefficiencies and market challenges, which could hinder Algoma Steel's ability to achieve profitability and financial health.

Weak Market Demand and Tariff Uncertainty

Ongoing weak demand and tariff issues pose risks to Algoma Steel's market position and revenue stability, affecting long-term strategic planning and growth.

Algoma Steel Group Business Overview & Revenue Model

Company Description

Algoma Steel Group Inc. (ASTL) is a leading North American steel producer based in Sault Ste. Marie, Ontario. The company specializes in the production of hot and cold-rolled steel products, as well as steel plate and sheet products, primarily serving the automotive, construction, and energy sectors. With a focus on innovation and sustainability, Algoma Steel is committed to providing high-quality steel solutions while reducing its environmental impact.

How the Company Makes Money

Algoma Steel generates revenue primarily through the sale of its steel products, which are sold to various industries including automotive, construction, and energy. The company operates on a business model that includes both direct sales to large manufacturers and distribution through third-party channels. Key revenue streams include the production of flat-rolled steel products, as well as value-added services such as steel processing and finishing. Algoma Steel may also engage in long-term contracts with major clients, ensuring stable revenue. Additionally, partnerships with industry players and participation in government contracts for infrastructure projects can further enhance earnings potential.

Algoma Steel Group Financial Statement Overview

Summary

Algoma Steel Group faces significant financial challenges, with negative profitability metrics and declining revenue. The balance sheet remains relatively stable, with a manageable debt level, but profitability needs improvement to enhance financial health. Cash flow constraints due to high capital expenditures pose risks to future growth. The company must focus on operational efficiency and cash management to navigate through current difficulties and return to a growth trajectory.

Income Statement

Algoma Steel Group's income statement reveals a challenging financial situation. The TTM (Trailing-Twelve-Months) gross profit margin is negative, indicating the cost of goods sold exceeds revenue. The net profit margin is also negative, highlighting the company's struggle to achieve profitability. Revenue has declined significantly from previous periods, showing a negative growth trajectory. Both EBIT and EBITDA margins are negative, reflecting operational inefficiencies. Despite these setbacks, the historical data shows the company was profitable in 2022, suggesting potential for recovery if operational issues are addressed.

Balance Sheet

The balance sheet of Algoma Steel Group presents a mixed picture. The debt-to-equity ratio is relatively moderate, suggesting a balanced approach to leveraging. However, the return on equity (ROE) is negative in TTM, showing a decline in profitability. The equity ratio remains stable, indicating solid capital structure. While the company has a considerable amount of total assets, the decline in cash reserves is a concern. Overall, the company maintains a stable equity base but needs to enhance profitability to improve ROE.

Cash Flow

Cash flow analysis for Algoma Steel Group shows some strengths and weaknesses. The TTM operating cash flow to net income ratio is positive, indicating operational cash generation despite net losses. However, free cash flow is negative, primarily due to high capital expenditures. This limits the company's ability to invest in growth opportunities without additional financing. Although the past cash flow was strong in 2022, recent trends highlight the need for more effective cash management to ensure sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.30B	2.45B	2.80B	2.78B	3.81B	1.79B
Gross Profit	-301.30M	-162.40M	282.30M	389.80M	1.51B	157.20M
EBITDA	-183.80M	-72.80M	278.40M	489.30M	1.29B	79.60M
Net Income	-308.20M	-222.67M	105.20M	298.50M	857.70M	-76.10M
Balance Sheet
Total Assets	2.95B	3.19B	2.68B	2.46B	2.69B	1.55B
Cash, Cash Equivalents and Short-Term Investments	82.50M	267.00M	97.90M	247.40M	915.30M	21.20M
Total Debt	648.00M	659.60M	146.10M	122.30M	96.20M	629.40M
Total Liabilities	1.65B	1.68B	1.17B	993.40M	1.11B	1.38B
Stockholders Equity	1.29B	1.51B	1.50B	1.46B	1.58B	173.80M
Cash Flow
Free Cash Flow	-423.40M	-362.70M	-195.50M	-156.20M	1.10B	-63.70M
Operating Cash Flow	2.80M	-62.60M	294.60M	177.30M	1.26B	8.10M
Investing Cash Flow	-383.30M	-272.20M	-490.10M	-333.50M	-165.70M	-72.90M
Financing Cash Flow	-34.10M	483.70M	44.70M	-569.60M	-198.70M	-167.40M

Algoma Steel Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ASTL, the sentiment is Positive. The current price of 6.22 is above the 20-day moving average (MA) of 5.47, above the 50-day MA of 5.53, and below the 200-day MA of 7.14, indicating a neutral trend. The MACD of 0.18 indicates Negative momentum. The RSI at 61.97 is Neutral, neither overbought nor oversold. The STOCH value of 85.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ASTL.

Algoma Steel Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LIF	78 Outperform	C$1.85B	16.27	16.92%	6.37%	-10.99%	-43.30%
VNP	66 Neutral	C$1.73B	28.28	26.65%	―	30.36%	181.15%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
TKO	58 Neutral	$2.70B	―	-10.53%	―	1.17%	-169.37%
ASTL	55 Neutral	$611.76M	-0.92	-59.32%	4.49%	―	―
TSL	52 Neutral	C$71.00M	-14.12	-4.54%	2.60%	-16.85%	-117.65%
ABRA	41 Neutral	$1.68B	―	-122.96%	―	―	-171.41%

Algoma Steel Group Corporate Events

Algoma Steel Secures $500 Million Government Financing for EAF Transition

Algoma Steel Group Inc. has completed a $500 million financing transaction with the Governments of Canada and Ontario, aimed at strengthening its balance sheet and providing financial flexibility for its Electric Arc Furnace (EAF) transition. This financing, which includes contributions from the Canada Enterprise Emergency Funding Corporation and the Province of Ontario, underscores the alignment between government and industry to support a resilient and competitive Canadian steel sector. The funding will enable Algoma to focus on operational efficiency and its plate-first commercial strategy, while supporting its transformation into a leading producer of green steel.

Algoma Steel Announces Leadership Transition with New CEO and CFO Appointments

Algoma Steel Group Inc. has announced a leadership transition as part of its succession planning. Current CFO Rajat Marwah will succeed Michael Garcia as CEO effective January 1, 2026, while Michael Moraca will be promoted to CFO. This transition comes at a pivotal time for Algoma, which has recently secured liquidity support from federal and provincial governments and begun producing steel at its Electric Arc Furnace. The leadership change is expected to ensure stability and continuity as the company continues its transformation into a low-carbon steel producer.

Algoma Steel Group Faces Challenges Amidst Strategic Transition

Algoma Steel Group reported its third-quarter 2025 financial results, highlighting a significant net loss of $485.1 million, primarily due to a non-cash impairment loss and trade-related challenges, including U.S. tariffs. Despite these challenges, Algoma is advancing its transition to electric arc furnace technology, supported by $500 million in government liquidity, to strengthen its financial position and pursue sustainable profitability.