Algoma Steel Group (ASTL) AI Stock Analysis

• Market Cap: $662.13M
• Dividend Yield: 4.43%
• Average Volume (3M): 456.22K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 2,818
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Steel
• EPS (TTM): -0.48
• Shares Outstanding: 104,933,800
• 10 Day Avg. Volume: 555,961
• 30 Day Avg. Volume: 456,220
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.93
• Enterprise Value/Revenue: 0.72
• Enterprise Value/Gross Profit: -9.15
• Enterprise Value/Ebitda: -85.02
• 1Y Price Target: $9.99
• Price Target Upside: 58.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 48 Neutral
• Price Target: C$7.50 ▲(18.86% Upside)

The overall stock score for Algoma Steel Group is heavily influenced by substantial financial challenges and weak technical indicators. The company's negative profitability metrics and declining revenue are significant concerns. Additionally, the technical analysis suggests bearish momentum, further impacting the score. Although the dividend yield provides some reassurance, the negative P/E ratio indicates ongoing earnings difficulties, resulting in an overall cautious outlook.

Algoma Steel Group Business Overview & Revenue Model

Company Description

Algoma 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 Money

Algoma Steel Group generates revenue through the production and sale of steel products, catering to various industries such as automotive, construction, and energy. The company's revenue streams primarily consist of the sale of hot and cold rolled steel products, which are delivered to customers in Canada, the United States, and internationally. Algoma Steel benefits from its strategic location near key transportation routes, allowing for efficient distribution. Additionally, the company engages in partnerships and contracts with major industrial players, ensuring a steady demand for its steel products. Factors such as market demand, steel prices, and production efficiency significantly influence the company's earnings.

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. Cash flow constraints due to high capital expenditures pose risks to future growth.

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	1.77B	2.45B	2.80B	2.78B	3.81B	1.79B
Gross Profit	-139.30M	-162.40M	282.30M	389.80M	1.51B	157.20M
EBITDA	-15.00M	-72.80M	281.70M	489.30M	1.29B	171.90M
Net Income	-125.00M	-222.67M	105.20M	298.50M	857.70M	-76.10M
Balance Sheet
Total Assets	3.09B	3.19B	2.68B	2.46B	2.69B	1.55B
Cash, Cash Equivalents and Short-Term Investments	226.50M	267.00M	97.90M	247.40M	915.30M	21.20M
Total Debt	654.50M	659.60M	146.10M	122.30M	96.20M	629.40M
Total Liabilities	1.61B	1.68B	1.17B	993.40M	1.11B	1.38B
Stockholders Equity	1.48B	1.51B	1.50B	1.46B	1.58B	173.80M
Cash Flow
Free Cash Flow	-184.70M	-362.70M	-195.50M	-156.20M	1.10B	-63.70M
Operating Cash Flow	130.00M	-62.60M	294.60M	177.30M	1.26B	8.10M
Investing Cash Flow	-286.80M	-272.20M	-490.10M	-333.50M	-165.70M	-72.90M
Financing Cash Flow	475.60M	483.70M	44.70M	-569.60M	-198.70M	-167.40M

Algoma Steel Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 6.31 is below the 20-day moving average (MA) of 6.60, below the 50-day MA of 7.62, and below the 200-day MA of 9.38, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 38.26 is Neutral, neither overbought nor oversold. The STOCH value of 6.85 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LIF	78 Outperform	C$1.82B	15.99	17.32%	7.93%	-14.24%	-46.06%
VNP	73 Outperform	C$1.33B	29.64	21.38%	―	28.47%	196.88%
Sector *	61 Neutral	$10.43B	7.39	-0.05%	2.88%	2.86%	-36.73%
TSL	51 Neutral	C$72.68M	―	-4.19%	3.21%	-10.54%	-517.42%
ASTL	48 Neutral	$662.13M	―	-21.46%	4.43%	―	―
TGB	―	$1.13B	10.75	-5.19%	―	―	―
ABBRF	―	$649.92M	―	-79.33%	―	―	―

Algoma Steel Group Corporate Events

Algoma Steel Files Base Shelf Prospectus for Financial Flexibility

Algoma Steel Group Inc. has filed a base shelf prospectus with the Ontario Securities Commission and a corresponding registration statement with the U.S. SEC, allowing potential offerings of various securities over a 25-month period. This move is aimed at maintaining financial flexibility, although the company currently has no plans for a capital raise. The filings could facilitate the exercise of outstanding warrants and the resale of previously registered securities, impacting the company’s operational strategy and offering potential benefits to stakeholders.