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Worthington Steel, Inc. (WS)
NYSE:WS
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Worthington Steel, Inc.
(NYSE:WS)
66Neutral
Worthington Steel, Inc. (WS) vs. S&P 500 (SPY)
Market Cap
$1.34B
Dividend Yield2.43%
Average Volume (3M)374.51K
Price to Earnings (P/E)12.1
Beta (1Y)2.04
Revenue Growth-6.82%
EPS Growth-36.02%
CountryUS
Employees4,600
SectorGeneral
Sector StrengthN/A
IndustrySteel
Share Statistics
EPS (TTM)2.18
Shares Outstanding50,753,704
10 Day Avg. Volume598,890
30 Day Avg. Volume374,507
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)N/A
Price to Sales (P/S)0.84
Price to Cash Flow (P/CF)4.90
P/FCF Ratio9.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.00Price Target Upside30.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Worthington Steel, Inc. Business Overview & Revenue Model
Company DescriptionWorthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets, including automotive, heavy truck, agriculture, construction, and energy. Worthington Steel, Inc. was incorporated in 2023 and is based in Columbus, Ohio.
How the Company Makes MoneyWorthington Steel, Inc. generates revenue primarily through the sale of processed steel products. The company's key revenue streams include contracts with automotive manufacturers who require steel for vehicle production, partnerships with construction firms that utilize steel in building infrastructure, and sales to industrial equipment manufacturers. Worthington Steel capitalizes on its advanced processing capabilities, allowing it to offer value-added services such as custom cutting, slitting, and coating of steel products. These services enable WS to enhance its product offerings and maintain a competitive edge in the market. Strategic partnerships with suppliers and a focus on operational efficiency also contribute significantly to the company's financial performance, ensuring a steady flow of raw materials and optimizing production costs.
Worthington Steel, Inc. Financial Statement Overview
Summary
Worthington Steel, Inc. presents a balanced financial profile with strong profitability margins and a stable balance sheet. While revenue growth was negative, profitability metrics remain healthy. The company's debt is conservatively managed, but cash flow generation has weakened, presenting potential challenges in liquidity management. Continued focus on revenue growth and cash generation will be important for future performance stability.Income Statement
Worthington Steel, Inc. exhibited strong profitability metrics with a consistent gross profit margin and net profit margin improvement from the previous year. The company achieved a gross profit margin of 12.82% and a net profit margin of 4.51% for the most recent annual period. However, revenue declined by 5.01% year-over-year, indicating potential challenges in market demand or pricing pressures. The EBITDA margin was robust at 8.38%, showcasing good operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.23, indicating conservative leverage. The return on equity was 15.70%, demonstrating effective utilization of shareholder funds. However, the equity ratio slightly decreased to 52.80%, which suggests a marginal increase in leverage over the period. Overall, the company's balance sheet remains solid with manageable debt levels.70
Positive
Cash Flow
Cash flow performance was mixed, with operating cash flow declining compared to the previous year. The operating cash flow to net income ratio was 1.29, indicating adequate cash conversion from profits. However, free cash flow dropped significantly, resulting in a free cash flow to net income ratio of 0.62, suggesting less cash available for expansion or debt repayment.65
Positive
| Breakdown | ||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.29B | 3.43B | 3.61B | 4.07B | 2.13B | Gross Profit |
| 431.60M | 439.80M | 340.40M | 395.46M | 370.84M | EBIT |
| 197.00M | 194.50M | 127.48M | 226.58M | 221.52M | EBITDA |
| 259.80M | 287.50M | 205.30M | 274.70M | 268.36M | Net Income Common Stockholders |
| 143.40M | 154.70M | 87.10M | 180.40M | 171.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 52.00M | 40.20M | 32.68M | 20.05M | 17.46M | Total Assets |
| 1.74B | 1.87B | 1.76B | 2.08B | 1.37B | Total Debt |
| 187.00M | 223.90M | 100.39M | 153.90M | 8.11M | Net Debt |
| 135.00M | 183.70M | 67.72M | 133.85M | -9.35M | Total Liabilities |
| 594.20M | 748.90M | 609.79M | 817.66M | 551.82M | Stockholders Equity |
| 1.01B | 985.30M | 1.03B | 1.13B | 661.33M |
| Cash Flow | Free Cash Flow | |||
| 135.70M | 96.10M | 269.54M | 3.05M | 123.75M | Operating Cash Flow |
| 202.90M | 199.50M | 315.01M | 39.49M | 152.55M | Investing Cash Flow |
| -128.90M | -123.20M | -22.15M | -395.35M | -27.69M | Financing Cash Flow |
| -236.40M | -68.80M | -280.23M | 358.45M | -116.68M |
Worthington Steel, Inc. Technical Analysis
Negative
26.15
Price Trends
27.89
Negative
33.55
Negative
33.53
Negative
Market Momentum
-0.46
Negative
44.95
Neutral
28.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WS, the sentiment is Negative. The current price of 26.15 is below the 20-day moving average (MA) of 26.21, below the 50-day MA of 27.89, and below the 200-day MA of 33.53, indicating a bearish trend. The MACD of -0.46 indicates Negative momentum. The RSI at 44.95 is Neutral, neither overbought nor oversold. The STOCH value of 28.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WS.
Worthington Steel, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.53B | 18.31 | 11.71% | 1.50% | -6.56% | -31.89% | |
75 Outperform | $19.27B | 13.00 | 17.27% | 1.44% | -6.68% | -32.96% | |
71 Outperform | $29.41B | 15.08 | 9.79% | 1.70% | -11.46% | -53.33% | |
66 Neutral | $1.34B | 12.07 | 11.10% | 2.43% | -6.82% | -36.02% | |
66 Neutral | $5.52B | 80.60 | 1.78% | 1.48% | -7.93% | -89.29% | |
55 Neutral | $4.29B | -18.57 | -4.70% | 5.69% | 27.38% | -68.17% | |
49 Neutral | $9.73B | 27.51 | 3.43% | 0.47% | -13.48% | -56.94% |
* General Sector Average
Performance Comparison
WS
Worthington Steel, Inc.
26.15
-8.98
-25.56%
CMC
Commercial Metals Company
48.82
-9.36
-16.09%
NUE
Nucor
127.30
-68.27
-34.91%
RS
Reliance Steel
294.33
-34.79
-10.57%
STLD
Steel Dynamics
128.34
-18.21
-12.43%
X
United States Steel
42.96
2.39
5.89%
Worthington Steel, Inc. Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: -2.72% | Next Earnings Date: Jun 25, 2025
Earnings Call Sentiment Negative
The earnings call highlighted strategic growth initiatives, including new automotive business, expansion in the electrical steel market, and AI integration. However, these positives were overshadowed by significant declines in adjusted EBITDA, shipment volumes, and net sales, as well as challenges in key markets like automotive and construction.Highlights
New Automotive OEM Business
Worthington Steel continued to grow market share with new automotive OEM business, which is expected to ramp up over the next few months.
Best Supplier of the Year Award
Worthington Steel's electrical steel operation was awarded the Best Supplier of the Year award by Mahle for the third consecutive year, recognizing their exceptional performance in quality, delivery, and support of new product development.
Strategic Growth and Expansion
Progress on the 52% ownership stake in Sitem, a European electrical steel lamination manufacturer, and expansion of electrical steel capabilities in Canada and Mexico are on track.
AI Initiatives and Collaboration
Worthington Steel's leadership team initiated an AI journey to incorporate AI into their operating model and expand their advanced analytics portfolio.
Lowlights
Decrease in Adjusted EBITDA and Earnings Per Share
Adjusted EBITDA was $41.9 million, down from $82.8 million in the prior year quarter. Earnings per share were $0.27 compared to $0.98 in the previous year.
Decline in Shipments and Revenue
The company experienced a 15% decline in net sales, primarily due to lower volumes and lower direct market pricing. Shipments were down 11% compared to the prior year quarter.
Challenges in Automotive and Construction Markets
Shipments to the automotive market were down 3%, and construction volumes decreased 20% year-over-year due to economic uncertainty and tough prior-year comparisons.
Asset Impairment Charges
The company recognized $7.4 million in asset impairment charges related to operational consolidation and an in-process R&D intangible write-off.
Company Guidance
In Worthington Steel's third-quarter fiscal year 2025 earnings call, the company reported an adjusted EBITDA of $41.9 million, a decrease from $82.8 million in the previous year. Earnings per share were $0.27 compared to $0.98 in the same period last year, impacted by lower volumes and average selling prices. Shipments to the automotive market fell by 3%, while the construction market saw a 20% year-over-year volume decrease. The company remains cautiously optimistic about the North American automotive market, projecting flat production at 15.3 million units for calendar year 2025. Worthington Steel is also expanding its electrical steel capabilities in Canada and Mexico, with new production expected to begin in late 2025 and early 2026, respectively. The company is optimistic about its strategic growth initiatives, focusing on the electrical steel market and the completion of a 52% stake acquisition in Sitem, a European electrical steel lamination manufacturer. Despite current market uncertainties, Worthington Steel anticipates improved clarity and performance in the second half of 2025.Worthington Steel, Inc. Corporate Events
Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
Worthington Steel Appoints New Director and Reports Earnings
Positive
Dec 20, 2024
Worthington Steel, Inc. announced the appointment of Scott Kelly as a new board director, who will serve until 2027 and join the Nominating and Governance Committee. The company reported its second quarter fiscal 2025 financial results, highlighting a decrease in net sales by 9% to $739.0 million, but an increase in net earnings to $12.8 million from a prior loss. The company’s operating income rose significantly due to increased gross margins and reduced costs post-separation from Worthington Enterprises, despite a decrease in direct selling prices and volumes. Additionally, Worthington Steel declared a quarterly dividend and is investing in strategic expansions to enhance its operations.
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.