Worthington Steel, Inc. (WS) AI Stock Analysis

• Market Cap: $1.25B
• Dividend Yield: 2.6%
• Average Volume (3M): 191.58K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 1.58
• Revenue Growth: -6.82%
• EPS Growth: -36.02%
• Country: US
• Employees: 5,000
• Sector: General
• Sector Strength: N/A
• Industry: Steel
• EPS (TTM): 0.35
• Shares Outstanding: 50,740,547
• 10 Day Avg. Volume: 232,471
• 30 Day Avg. Volume: 191,582
• PEG Ratio: -0.27
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.64
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 0.10
• Enterprise Value/Gross Profit: 3.37
• Enterprise Value/Ebitda: 1.35
• 1Y Price Target: $34.00
• Price Target Upside: 38.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 66 Neutral
• Price Target: $27.00 ▲(9.76%Upside)

Worthington Steel faces challenges with declining revenue and profitability yet shows strength in cash flow management and strategic growth initiatives. While technical indicators suggest caution, the company's reasonable valuation and strategic focus on expanding its electrical steel capabilities offer potential upside.

Worthington Steel, Inc. Business Overview & Revenue Model

Company Description

Worthington Steel, Inc. (WS) is a premier steel processing company, specializing in providing innovative steel solutions to various industries, including automotive, construction, and industrial manufacturing. With a focus on quality and customer satisfaction, WS offers a comprehensive range of products and services such as steel slitting, cutting, and custom processing to meet the specific needs of its diverse clientele.

How the Company Makes Money

Worthington Steel, Inc. generates revenue primarily through the processing and sale of steel products. The company purchases raw steel coils from steel mills, processes these materials according to customer specifications, and sells the finished products to various industries. Key revenue streams include custom steel processing services like slitting, shearing, and blanking, as well as value-added services such as packaging and logistics support. Strategic partnerships with steel producers and a robust distribution network further enhance WS's ability to efficiently serve its customers and maintain a steady flow of income.

Worthington Steel, Inc. Financial Statement Overview

Summary

Worthington Steel demonstrates resilience with strong cash flow management and a robust equity position. Despite a decline in revenue and profitability, the company efficiently converts earnings into cash, ensuring liquidity and financial health.

Income Statement

Worthington Steel shows a mixed performance in its income statement. The TTM data indicates a decrease in total revenue by 7.56% compared to the previous year. However, the gross profit margin stands at 12.31%, and the net profit margin is 3.41%, reflecting moderate profitability. EBIT and EBITDA margins are 4.60% and 6.08% respectively, indicating the company maintains reasonable control over its operating expenses.

Balance Sheet

The balance sheet suggests a stable financial position with a robust equity base. The debt-to-equity ratio is approximately 0.19, indicating low financial leverage. The equity ratio is 59.95%, reflecting a strong reliance on equity financing. However, the return on equity in the TTM period is 10.68%, which shows a decline from the previous year, suggesting that profitability on equity is decreasing.

Cash Flow

Cash flow analysis reveals a strong performance with a 74.01% growth in free cash flow in the TTM period compared to the previous year. The operating cash flow to net income ratio is 1.96, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio of 1.55 also indicates the ability to generate more cash than net income, which is a positive sign for liquidity and financial health.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement		Total Revenue
3.17B	3.43B	3.61B	4.07B	2.13B
	Gross Profit
390.70M	439.80M	340.40M	395.46M	370.84M
	EBIT
146.00M	194.50M	127.48M	226.58M	221.52M
	EBITDA
209.70M	287.50M	205.30M	274.70M	268.36M
	Net Income Common Stockholders
108.20M	154.70M	87.10M	180.40M	171.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
63.30M	40.20M	32.68M	20.05M	17.46M
	Total Assets
1.80B	1.87B	1.76B	2.08B	1.37B
	Total Debt
189.20M	223.90M	100.39M	153.90M	8.11M
	Net Debt
125.90M	183.70M	67.72M	133.85M	-9.35M
	Total Liabilities
656.60M	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
138.60M	96.10M	269.54M	3.05M	123.75M
	Operating Cash Flow
212.00M	199.50M	315.01M	39.49M	152.55M
	Investing Cash Flow
-133.20M	-123.20M	-22.15M	-395.35M	-27.69M
	Financing Cash Flow
-76.30M	-68.80M	-280.23M	358.45M	-116.68M

Worthington Steel, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 24.6 is below the 20-day moving average (MA) of 25.82, below the 50-day MA of 25.32, and below the 200-day MA of 31.19, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 41.47 is Neutral, neither overbought nor oversold. The STOCH value of 18.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WS.

Worthington Steel, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMC	70 Outperform	$5.47B	80.35	1.78%	1.49%	-7.93%	-89.29%
WS	66 Neutral	$1.25B	11.23	11.10%	2.60%	-6.82%	-36.02%
ZEUS	58 Neutral	$340.35M	21.22	2.95%	2.10%	-9.65%	-61.57%
Sector *	58 Neutral	$4.90B	18.48	-17.00%	7.21%	13.61%	-24.47%
RDUS	53 Neutral	$832.80M	―	-41.03%	2.54%	-2.75%	-339.59%
SID	49 Neutral	$1.89B	―	-16.28%	11.30%	-9.84%	-14783.33%
CLF	48 Neutral	$3.55B	―	-17.57%	―	-15.00%	-423.14%

Worthington Steel, Inc. Corporate Events

Worthington Steel Appoints New Director and Reports Earnings

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.