Worthington Steel, Inc. (WS) AI Stock Analysis

• Market Cap: $1.83B
• Dividend Yield: 1.78%
• Average Volume (3M): 230.45K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 1.69
• Revenue Growth: -0.75%
• EPS Growth: -13.51%
• Country: US
• Employees: 5,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.38
• Shares Outstanding: 50,833,057
• 10 Day Avg. Volume: 338,713
• 30 Day Avg. Volume: 230,449
• 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: 1.01
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 4.46
• Enterprise Value/Ebitda: 7.33
• 1Y Price Target: $39.00
• Price Target Upside: 8.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.61
• Revenue Forecast (FY): $3.43B

• Rating: 77 Outperform
• Price Target: $41.00 ▲(13.76% Upside)

Worthington Steel, Inc. receives a strong overall stock score of 76.9, driven primarily by its robust financial performance and positive earnings call outcomes. The company's strategic initiatives and market share gains are significant strengths. Technical analysis supports a bullish outlook, although valuation metrics suggest the stock is fairly priced. Challenges in toll processing volumes and SG&A expenses are noted but do not overshadow the company's positive trajectory.

Positive Factors

Market Share Gains

Market share gains in the automotive sector, with a 26% increase in direct shipments, indicate strong competitive positioning and potential for sustained revenue growth.

Cash Generation

Strong cash flow generation supports operational stability and provides flexibility for future investments and strategic initiatives.

AI and Automation Integration

Successful integration of AI and automation enhances operational efficiency, leading to cost savings and improved decision-making capabilities.

Negative Factors

Decreased Toll Processing Volumes

Reduced toll processing volumes may impact revenue streams and highlight challenges in adapting to changing market conditions.

Higher SG&A Expenses

Rising SG&A expenses can pressure profit margins, indicating potential inefficiencies that may need addressing for long-term sustainability.

Compressed Galvanized Spreads

Decreased demand in the construction sector leading to compressed spreads could affect profitability and highlight sector-specific vulnerabilities.

Worthington Steel, Inc. Business Overview & Revenue Model

Company Description

Worthington 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 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 a strong financial position with consistent revenue growth and profitability. The company maintains a healthy balance sheet with low leverage and effective equity utilization. Cash flow generation is robust, supporting ongoing operations and potential growth initiatives. While the company is performing well, there is potential for further improvement in profit margins and operational efficiency.

Income Statement

Worthington Steel, Inc. shows a solid performance in its income statement with a consistent revenue growth rate of 4.24% in the TTM period, indicating a positive trajectory. The gross profit margin of 12.76% and net profit margin of 3.82% reflect stable profitability, although there is room for improvement. The EBIT and EBITDA margins are moderate at 5.45% and 7.76%, respectively, suggesting efficient operations but with potential for enhanced cost management.

Balance Sheet

The balance sheet of Worthington Steel, Inc. is strong, with a low debt-to-equity ratio of 0.22, indicating prudent financial leverage. The return on equity (ROE) is healthy at 11.57%, showcasing effective use of shareholder funds. The equity ratio stands at 51.96%, reflecting a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis reveals a robust free cash flow growth rate of 42.73% in the TTM period, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 1.61 indicates efficient cash conversion, while the free cash flow to net income ratio of 0.63 suggests a good balance between profitability and cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.09B	3.43B	3.61B	4.07B	2.13B
Gross Profit	388.60M	439.80M	336.50M	395.50M	370.84M
EBITDA	221.20M	287.50M	201.30M	316.80M	268.36M
Net Income	110.70M	154.70M	87.10M	180.40M	171.01M
Balance Sheet
Total Assets	1.96B	1.87B	1.76B	2.08B	1.37B
Cash, Cash Equivalents and Short-Term Investments	38.00M	40.20M	32.68M	20.05M	17.46M
Total Debt	227.90M	231.50M	100.39M	153.90M	8.11M
Total Liabilities	763.90M	748.90M	609.79M	817.66M	551.82M
Stockholders Equity	1.07B	985.30M	1.03B	1.13B	661.33M
Cash Flow
Free Cash Flow	99.90M	96.10M	269.54M	3.05M	123.75M
Operating Cash Flow	230.30M	199.50M	315.01M	39.49M	152.55M
Investing Cash Flow	-129.10M	-123.20M	-22.15M	-395.35M	-27.69M
Financing Cash Flow	-48.50M	-68.80M	-280.23M	358.45M	-116.68M

Worthington Steel, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 36.04 is above the 20-day moving average (MA) of 35.66, above the 50-day MA of 33.08, and above the 200-day MA of 29.64, indicating a bullish trend. The MACD of 0.94 indicates Positive momentum. The RSI at 61.55 is Neutral, neither overbought nor oversold. The STOCH value of 45.80 is Neutral, 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
WS	77 Outperform	$1.83B	14.60	11.71%	1.78%	-0.75%	-13.51%
SIM	73 Outperform	$5.06B	25.01	5.84%	―	-16.81%	-67.68%
GGB	67 Neutral	$6.97B	14.19	5.21%	2.92%	-2.53%	-36.08%
ACNT	64 Neutral	$149.18M	171.66	-3.84%	―	-29.03%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
ZEUS	61 Neutral	$501.32M	38.12	2.40%	1.42%	-5.64%	-48.34%
SID	51 Neutral	$2.18B	-7.99	-10.50%	―	-5.79%	-5.30%

Worthington Steel, Inc. Corporate Events

Worthington Steel posts stronger Q2 results, raises profitability

On December 17, 2025, Worthington Steel reported its fiscal 2026 second-quarter results for the period ended November 30, 2025, posting an 18% year-over-year increase in net sales to $871.9 million driven largely by higher direct volumes and higher average direct selling prices, partially offset by lower toll volumes following the May 2025 closure of its Cleveland toll-processing facility and softer mill demand. Gross margin rose by $13.2 million to $93.2 million on stronger direct spreads and a smaller inventory holding loss, lifting operating income to $21.7 million and net earnings attributable to controlling interest to $18.8 million, or $0.37 per diluted share, with adjusted earnings per diluted share nearly doubling to $0.38 versus the prior year; management highlighted these results, along with a quarterly dividend declaration of $0.16 per share payable in March 2026, as evidence that its strategic focus on higher-value solutions and disciplined mix is strengthening profitability despite mixed market conditions.

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.