Worthington Steel, Inc. (WS) AI Stock Analysis

• Market Cap: $1.83B
• Dividend Yield: 1.78%
• Average Volume (3M): 168.94K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 1.75
• Revenue Growth: -6.75%
• EPS Growth: -5.18%
• Country: US
• Employees: 5,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.77
• Shares Outstanding: 50,833,057
• 10 Day Avg. Volume: 153,982
• 30 Day Avg. Volume: 168,945
• PEG Ratio: -0.39
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 12.34
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 5.37
• Enterprise Value/Ebitda: 8.97
• 1Y Price Target: $36.00
• Price Target Upside: 0.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 2.66
• Revenue Forecast (FY): $3.17B

• Rating: 71 Outperform
• Price Target: $40.00 ▲(11.36% Upside)

Worthington Steel, Inc. receives a solid score driven by strong earnings performance and strategic initiatives, particularly in the automotive sector and AI-driven projects. The technical analysis supports a bullish outlook, although caution is advised due to overbought signals. The valuation is fair, and financial performance is stable but could improve in cash flow management.

Positive Factors

Automotive Market Growth

Worthington Steel's strong performance in the automotive sector, with a 13% increase in shipments, indicates robust market share gains and positions the company well for sustained growth in this key industry.

Strategic Expansion

The acquisition of a majority stake in Sitem enhances Worthington Steel's presence in the global EV market, supporting long-term growth through strategic expansion and increased market penetration.

AI-Driven Efficiency Improvements

Worthington Steel's focus on AI-driven efficiency improvements is expected to enhance operational efficiency, reduce costs, and free up cash flow, contributing to long-term profitability and competitive advantage.

Negative Factors

Declining Free Cash Flow Growth

A significant decline in free cash flow growth suggests potential liquidity challenges, which could impact Worthington Steel's ability to invest in growth opportunities and maintain financial flexibility.

Agricultural Market Challenges

The substantial decline in agricultural market shipments indicates ongoing sector challenges, which may continue to affect Worthington Steel's revenue and market diversification efforts.

Potential Inventory Holding Losses

Expected inventory holding losses could negatively impact Worthington Steel's profitability, highlighting the risk of price volatility in raw materials affecting financial performance.

Worthington Steel, Inc. Business Overview & Revenue Model

Company Description

Worthington Steel, Inc. (WS) is a leading manufacturer and distributor of steel products and services, catering primarily to the construction, automotive, and industrial sectors. The company specializes in providing high-quality steel solutions, including flat-rolled steel, processed steel, and custom fabrication services. With a commitment to innovation and sustainability, Worthington Steel aims to deliver exceptional value to its customers through a diverse range of steel products that meet the evolving demands of various industries.

How the Company Makes Money

Worthington Steel generates revenue through multiple streams, predominantly by selling steel products to various industries, including construction and automotive. The company earns money through direct sales of its core products, such as flat-rolled steel and custom-fabricated steel components. Additionally, WS engages in value-added services, such as processing and fabrication, which command higher margins. Strategic partnerships with major manufacturers and suppliers enhance its distribution capabilities and market reach, thereby contributing significantly to its earnings. Furthermore, the company's focus on sustainability and innovation allows it to tap into niche markets, driving additional revenue growth.

Worthington Steel, Inc. Financial Statement Overview

Summary

Worthington Steel, Inc. demonstrates stable financial performance with consistent revenue growth and efficient production processes. The balance sheet reflects prudent leverage and effective equity utilization. However, declining free cash flow growth and moderate cash generation efficiency highlight areas for improvement in liquidity management.

Income Statement

Worthington Steel, Inc. shows a stable revenue base with a TTM revenue growth rate of 1.26%. The gross profit margin is consistent at around 12.88%, indicating efficient production processes. However, the net profit margin of 3.79% suggests room for improvement in cost management. EBIT and EBITDA margins are moderate, reflecting stable operational efficiency.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.27, indicating prudent leverage use. Return on equity is reasonable at 11.29%, showing effective use of shareholder funds. The equity ratio of 49.25% suggests a balanced capital structure, though there is potential to enhance asset utilization.

Cash Flow

Operating cash flow is positive, but the free cash flow growth rate has declined by 43.21%, indicating potential liquidity challenges. The operating cash flow to net income ratio of 0.25 suggests moderate cash generation efficiency. The free cash flow to net income ratio of 0.69 indicates a need for improved cash retention.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2022	Dec 2021	Dec 2021
Income Statement
Total Revenue	3.13B	3.09B	3.43B	3.61B	2.13B	4.07B
Gross Profit	403.40M	388.60M	439.80M	336.50M	370.84M	395.50M
EBITDA	241.40M	221.20M	287.50M	201.30M	268.36M	316.80M
Net Income	118.60M	110.70M	154.70M	87.10M	171.01M	180.40M
Balance Sheet
Total Assets	2.24B	1.96B	1.87B	1.76B	1.37B	2.08B
Cash, Cash Equivalents and Short-Term Investments	78.30M	92.90M	40.20M	32.68M	17.46M	20.05M
Total Debt	333.30M	227.90M	231.50M	100.39M	8.11M	153.90M
Total Liabilities	912.40M	763.90M	748.90M	609.79M	551.82M	817.66M
Stockholders Equity	1.10B	1.07B	985.30M	1.03B	661.33M	1.13B
Cash Flow
Free Cash Flow	88.70M	99.90M	96.10M	269.54M	123.75M	3.05M
Operating Cash Flow	170.70M	230.30M	199.50M	315.01M	152.55M	39.49M
Investing Cash Flow	-148.60M	-129.10M	-123.20M	-22.15M	-27.69M	-395.35M
Financing Cash Flow	19.90M	-48.50M	-68.80M	-280.23M	-116.68M	358.45M

Worthington Steel, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.92
• 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 WS, the sentiment is Positive. The current price of 35.92 is above the 20-day moving average (MA) of 32.83, above the 50-day MA of 31.72, and above the 200-day MA of 29.08, indicating a bullish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 69.83 is Neutral, neither overbought nor oversold. The STOCH value of 88.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WS.

Worthington Steel, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	73 Outperform	$4.62B	23.68	5.84%	―	-16.81%	-67.68%
WS	71 Outperform	$1.83B	15.24	11.22%	1.78%	-6.75%	-5.18%
GGB	67 Neutral	$6.62B	13.17	5.21%	3.15%	-2.53%	-36.08%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
ZEUS	61 Neutral	$452.94M	34.45	2.40%	1.58%	-5.64%	-48.34%
ACNT	61 Neutral	$139.25M	160.24	-3.84%	―	-29.03%	―
SID	54 Neutral	$2.23B	-5.50	-10.50%	―	-5.79%	-5.30%

Worthington Steel, Inc. Corporate Events

Worthington Steel Reports Strong Start to Fiscal 2026

On September 24, 2025, Worthington Steel held its Annual Meeting of Shareholders where directors were elected, executive compensation was approved, and KPMG LLP was ratified as the independent auditor. The company declared a quarterly dividend of $0.16 per share, payable on December 26, 2025. Worthington Steel reported a strong start to fiscal 2026 with a 5% increase in net sales to $872.9 million and a 30% rise in net earnings to $36.8 million, driven by disciplined execution and the acquisition of Sitem Group. The company faced lower toll volumes but benefited from higher direct volumes and spreads, reflecting its adaptability in a soft market.