Worthington Industries (WOR) AI Stock Analysis

• Market Cap: $2.55B
• Dividend Yield: 1.31%
• Average Volume (3M): 519.05K
• Price to Earnings (P/E): 42.8
• Beta (1Y): 0.93
• Revenue Growth: -69.82%
• EPS Growth: -78.10%
• Country: US
• Employees: 6,000
• Sector: Industrials
• Sector Strength: 78
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.20
• Shares Outstanding: 49,917,225
• 10 Day Avg. Volume: 244,422
• 30 Day Avg. Volume: 519,053
• 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: 0.86
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.70
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $57.00
• Price Target Upside: 9.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Worthington Industries demonstrates strong financial performance, particularly in cash flow and operational efficiency, despite some revenue challenges. The technical indicators suggest positive momentum, but caution due to potential overvaluation is advised, given the high P/E ratio. The latest earnings call provides a balanced outlook with positive elements in innovation and financial stability.

Positive Factors

Financial Performance

Strong FQ3 results were reported in the fifth 'clean' reporting quarter without the separated steel business.

Market Strategy

The company has embarked on a three-pillar strategy: Transformation, Innovation, and Strategic M&A.

Valuation

Worthington Enterprises stock is believed to be undervalued by 20% to 40%, suggesting potential for stock price appreciation.

Negative Factors

Bad Debt Impact

The segment was also impacted by $2m of an increased bad debt reserve due to two customers who recently declared bankruptcy.

Sales Decline

Consumer Products’ sales were down -2% y-o-y in Q2.

Stock Movement

Today's stock move appears to be a bit overdone given it was a 'less bad' quarter.

Worthington Industries Business Overview & Revenue Model

Company Description

Worthington Industries, Inc., an industrial manufacturing company, focuses on value-added steel processing, manufactured consumer, building, and sustainable mobility products in North America and internationally. It operates through Steel Processing, Consumer Products, Building Products, and Sustainable Energy Solutions segments. The Steel Processing segment processes flat-rolled steel for customers primarily in the automotive, aerospace, agricultural, appliance, construction, container, energy, hardware, heavy-truck, HVAC, lawn and garden, leisure and recreation, office furniture, and office equipment markets. It also toll processes steel for steel mills, large end-users, service centers, and other processors. The Consumer Products segment sells tools, outdoor living, and celebrations products under the Coleman, Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, Hawkeye, Worthington Pro Grade, and Level5 brand names. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products to gas producers and distributors. The Sustainable Energy Solutions segment offers on-board fueling systems and services, as well as gas containment solutions and services for the storage, transport, and distribution of industrial gases. The company was founded in 1955 and is headquartered in Columbus, Ohio.

How the Company Makes Money

Worthington Industries generates revenue primarily through its two main segments: Steel Processing and Pressure Cylinders. In the Steel Processing segment, the company earns money by purchasing raw steel, which is then processed and sold as customized steel products to various industries, including automotive, construction, and industrial. This involves services like slitting, cutting, and blanking steel to meet specific customer requirements. In the Pressure Cylinders segment, revenue is driven by the manufacturing and sale of products such as industrial gas cylinders, consumer products like propane cylinders, and alternative fuel cylinders. The company benefits from long-standing relationships with key clients and partners in these industries, which helps ensure a steady demand for its products. Additionally, Worthington Industries invests in innovation and operational efficiencies to maintain competitive pricing and high product quality, further securing its revenue streams.

Worthington Industries Financial Statement Overview

Summary

Worthington Industries shows strength in cash flow generation and a stable balance sheet with low leverage. While profitability metrics are solid, revenue growth has been a concern. The company remains financially stable with strong operational efficiencies, providing a positive outlook despite some revenue decline.

Income Statement

The TTM (Trailing-Twelve-Months) gross profit margin is 26.31%, indicating strong cost management, while the net profit margin is 5.23%, reflecting moderate profitability. However, the revenue has decreased compared to the previous annual period, showing a declining trend. The EBIT margin is low at 2.13%, but EBITDA margin remains stable at 9.04%, suggesting operational efficiency.

Balance Sheet

The debt-to-equity ratio is 0.34, showing a conservative leverage position relative to equity. Return on equity (ROE) is 6.43%, demonstrating modest profitability. The equity ratio is 55.79%, indicating financial stability with a solid asset base funded by equity.

Cash Flow

The free cash flow has grown significantly over the TTM (Trailing-Twelve-Months), indicating strong cash generation. The operating cash flow to net income ratio is 3.19, reflecting strong cash flow relative to profitability. The free cash flow to net income ratio is 3.00, demonstrating efficient conversion of earnings into cash.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.25B	4.92B	5.24B	3.17B	3.06B
	Gross Profit
285.02M	663.31M	714.82M	639.08M	443.34M
	EBIT
-73.46M	394.20M	531.60M	1.02B	239.17M
	EBITDA
156.49M	149.27M	643.81M	375.59M	235.03M
	Net Income Common Stockholders
110.62M	256.53M	379.39M	723.79M	78.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
244.22M	454.95M	34.48M	640.31M	147.20M
	Total Assets
1.64B	3.65B	3.64B	3.37B	2.33B
	Total Debt
317.18M	795.38M	844.41M	747.81M	736.28M
	Net Debt
72.95M	340.44M	809.92M	107.50M	589.08M
	Total Liabilities
747.63M	1.83B	2.03B	1.82B	1.37B
	Stockholders Equity
888.88M	1.70B	1.48B	1.40B	820.82M
Cash Flow		Free Cash Flow
206.45M	539.00M	-24.49M	192.20M	241.22M
	Operating Cash Flow
289.98M	625.36M	70.11M	274.38M	336.73M
	Investing Cash Flow
-140.81M	-71.78M	-438.19M	468.51M	-116.22M
	Financing Cash Flow
-359.89M	-133.13M	-237.75M	-249.78M	-165.68M

Worthington Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.99
• 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 WOR, the sentiment is Positive. The current price of 51.99 is above the 20-day moving average (MA) of 47.95, above the 50-day MA of 45.06, and above the 200-day MA of 42.92, indicating a bullish trend. The MACD of 1.45 indicates Negative momentum. The RSI at 65.72 is Neutral, neither overbought nor oversold. The STOCH value of 96.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WOR.

Worthington Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IIIN	72 Outperform	$519.77M	27.20	6.61%	0.35%	-0.33%	-7.06%
AZZ	70 Outperform	$2.71B	50.62	13.01%	0.78%	2.61%	-53.74%
NWPX	67 Neutral	$380.70M	11.78	9.13%	―	8.06%	38.46%
WOR	66 Neutral	$2.55B	42.77	6.56%	1.31%	-69.82%	-78.10%
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%
MEC	61 Neutral	$271.99M	10.78	10.78%	―	-1.16%	227.49%
RYI	56 Neutral	$677.73M	37.86	-1.00%	3.77%	-9.98%	-106.51%