Olympic Steel (ZEUS) AI Stock Analysis

• Market Cap: $330.86M
• Dividend Yield: 2.04%
• Average Volume (3M): 113.98K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 1.08
• Revenue Growth: -10.03%
• EPS Growth: -48.82%
• Country: US
• Employees: 2,163
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Steel
• EPS (TTM): 1.97
• Shares Outstanding: 11,162,704
• 10 Day Avg. Volume: 104,103
• 30 Day Avg. Volume: 113,980
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.18
• Price to Cash Flow (P/CF): 6.10
• P/FCF Ratio: 8.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $43.00
• Price Target Upside: 43.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Olympic Steel's stock score reflects a challenging financial performance with declining revenue and profitability, offset by a strong balance sheet and strategic investments. Technical indicators suggest bearish momentum, while valuation metrics are moderate. The earnings call provided a mixed outlook, with positive strategic actions overshadowed by increased debt and declining performance metrics.

Olympic Steel Business Overview & Revenue Model

Company Description

Olympic Steel, Inc. processes, distributes, and storage metal products in the United States and internationally. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The Carbon Flat Products segment sells and distributes processed carbon and coated flat-rolled sheets, coil and plate products, and fabricated parts. The Specialty Metals Flat Products segment sells and distributes processed aluminum and stainless flat-rolled sheets and coil products, flat bar products, and fabricated parts, as well as stainless steel and aluminum plates, sheets, angles, rounds, flat bars, tubing and pipe, and prime tin mill products. The Tubular and Pipe Products segment distributes metal tubing products, pipes, bars, valves and fittings, and fabricated pressure parts. The company also provides various processing services comprising cutting-to-length, slitting, shearing, roll forming, shape correction, surface improvement, blanking, tempering, plate burning, and stamping as well as offers value-added processing of saw cutting, laser cutting, beveling, threading, and grooving services. In addition, the company provides shot blasting, grinding, edging, and polishing; bending, drilling, milling, tapping, boring, and sawing metal; machining, welding, assembly, and painting of component parts. Further, the company process metals to specified lengths, widths, shapes, and surface. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, commercial appliances, and electrical equipment as well as military vehicles and equipment, general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Bedford Heights, Ohio.

How the Company Makes Money

Olympic Steel generates revenue primarily through the sale of processed and distributed metal products. The company purchases large volumes of flat-rolled carbon, stainless steel, and aluminum from major mills and suppliers, which it then processes to customer specifications using advanced machinery and technology. These products are subsequently sold to a wide range of industries, including automotive, construction, and manufacturing, either directly or through distribution networks. Olympic Steel's business model relies on maintaining strong relationships with both its suppliers and customers, optimizing inventory management, and leveraging its processing capabilities to add value to raw materials. Additionally, strategic partnerships and long-term contracts with key clients and suppliers play a crucial role in driving sales and sustaining profitability.

Olympic Steel Financial Statement Overview

Summary

Olympic Steel faces challenges in terms of revenue and profit growth, with declining performance across most income statement metrics. The balance sheet remains strong, supported by a high equity ratio and no debt, which provides financial stability. Cash flow management needs attention, as free cash flow has decreased significantly. Overall, while the company maintains a solid balance sheet, improving profitability and cash generation are critical for future growth.

Income Statement

Olympic Steel's revenue has declined over the past two years, with a notable drop from 2022 to 2023, indicating challenges in maintaining growth. Margins have also been under pressure, with the net profit margin dropping from 4.2% in 2023 to 1.2% in 2024. The gross profit margin has remained relatively stable, but the decline in EBIT and EBITDA margins reflects potential inefficiencies or increased costs.

Balance Sheet

The balance sheet shows a strong equity position, with an equity ratio of over 80% in 2024, indicating a solid financial foundation. The company has significantly reduced its debt, resulting in a debt-free position in 2024, which enhances financial stability. However, the return on equity has decreased significantly due to declining net income, which could impact future growth.

Cash Flow

Operating cash flow remains positive, but a substantial decline in free cash flow from 2023 to 2024 raises concerns about cash generation efficiency. The free cash flow to net income ratio has decreased, indicating less cash being generated relative to profits. Despite a challenging year, cash management remains adequate with no significant liquidity issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.94B	2.16B	2.56B	2.31B	1.23B
	Gross Profit
1.92B	475.60M	486.06M	510.20M	255.04M
	EBIT
47.86M	77.67M	133.75M	172.47M	573.00K
	EBITDA
47.86M	104.77M	153.24M	191.50M	18.99M
	Net Income Common Stockholders
22.98M	44.53M	90.93M	121.05M	-5.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.91M	13.22M	12.19M	9.81M	5.53M
	Total Assets
1.04B	984.84M	891.63M	1.02B	640.61M
	Total Debt
310.27M	228.47M	194.41M	355.84M	186.15M
	Net Debt
298.35M	215.24M	182.22M	346.03M	180.62M
	Total Liabilities
470.57M	429.36M	375.66M	599.13M	339.60M
	Stockholders Equity
15.31M	555.48M	515.97M	424.44M	301.01M
Cash Flow		Free Cash Flow
4.19M	153.83M	166.00M	-157.38M	51.85M
	Operating Cash Flow
33.68M	175.16M	185.85M	-146.37M	61.65M
	Investing Cash Flow
-109.43M	-190.84M	-16.56M	-13.46M	-28.15M
	Financing Cash Flow
74.44M	16.72M	-166.91M	164.12M	-33.71M

Olympic Steel Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.94
• 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 ZEUS, the sentiment is Negative. The current price of 29.94 is below the 20-day moving average (MA) of 31.24, below the 50-day MA of 32.86, and below the 200-day MA of 37.67, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 41.34 is Neutral, neither overbought nor oversold. The STOCH value of 14.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZEUS.

Olympic Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMC	66 Neutral	$4.73B	69.51	1.78%	1.72%	-7.93%	-89.29%
GSM	61 Neutral	$608.75M	116.13	0.67%	1.64%	-0.37%	-94.30%
ZEUS	52 Neutral	$330.86M	15.06	4.07%	2.04%	-10.03%	-48.82%
ALB	48 Neutral	$6.44B	―	-12.18%	2.95%	-44.08%	-183.44%
CLF	48 Neutral	$3.60B	―	-10.36%	―	-12.78%	-301.57%
RDUS	47 Neutral	$817.58M	―	-41.03%	2.59%	-4.98%	-910.57%
Sector *	47 Neutral	$2.43B	-3.06	-22.76%	3.59%	4.02%	-29.07%

Olympic Steel Corporate Events

Olympic Steel Implements New Executive Severance Plan

Olympic Steel has approved a Key Employee Severance Benefit Plan, effective November 2, 2023, which will cover key executives, including the CFO and the President/COO, starting December 18, 2024. The severance benefits under this new plan are similar to those in the previously existing individual agreements, indicating a streamlined approach to executive compensation and retention strategies.