Olympic Steel (ZEUS) AI Stock Analysis

• Market Cap: $365.91M
• Dividend Yield: 1.86%
• Average Volume (3M): 75.15K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 1.16
• Revenue Growth: -9.65%
• EPS Growth: -61.57%
• Country: US
• Employees: 2,187
• Sector: Basic Materials
• Sector Strength: 67
• Industry: Steel
• EPS (TTM): 0.21
• Shares Outstanding: 11,162,704
• 10 Day Avg. Volume: 70,274
• 30 Day Avg. Volume: 75,154
• PEG Ratio: -0.86
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 128.34
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 0.92
• Enterprise Value/Ebitda: 1.12
• 1Y Price Target: $40.00
• Price Target Upside: 20.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 57 Neutral
• Price Target: $32.00 ▼(-3.82%Downside)

Olympic Steel's overall stock score reflects financial challenges, notably in revenue and profit margins, despite a strong balance sheet. The technical analysis shows neutral to slightly bearish signals. The valuation is reasonable, and the earnings call provided some positive strategic insights but was tempered by lower net income and rising expenses.

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 sources raw metals from various suppliers and processes them into customized forms like sheets, plates, and coils, which are then sold to a broad range of industrial customers. Key revenue streams include the sale of carbon flat products, stainless steel flat products, and tubular and pipe products. The company's earnings are influenced by factors such as metal price fluctuations, customer demand, and the ability to provide value-added services. Additionally, strategic partnerships with suppliers and customers, along with investments in technology and infrastructure, contribute to its revenue growth.

Olympic Steel Financial Statement Overview

Summary

Olympic Steel faces challenges with declining revenue and profit margins. Despite a strong balance sheet with no debt and high equity, cash flow management needs improvement, as free cash flow has significantly decreased.

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
EBITDA	79.04M	104.77M	153.24M	191.50M	18.99M
Net Income	22.98M	44.53M	90.93M	121.05M	-5.59M
Balance Sheet
Total Assets	1.04B	984.84M	891.63M	1.02B	640.61M
Cash, Cash Equivalents and Short-Term Investments	11.91M	13.22M	12.19M	9.81M	5.53M
Total Debt	310.27M	228.47M	194.41M	355.84M	186.15M
Total Liabilities	470.57M	429.36M	375.66M	599.13M	339.60M
Stockholders Equity	573.92M	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: Neutral
• Last Price: 33.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZEUS, the sentiment is Neutral. The current price of 33.27 is below the 20-day moving average (MA) of 33.94, above the 50-day MA of 32.23, and below the 200-day MA of 34.19, indicating a neutral trend. The MACD of 0.43 indicates Positive momentum. The RSI at 49.93 is Neutral, neither overbought nor oversold. The STOCH value of 46.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZEUS.

Olympic Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSB	80 Outperform	$385.07M	4.12	464.02%	24.53%	331.26%	391.35%
WS	77 Outperform	$1.60B	14.44	10.75%	2.01%	-9.83%	-28.70%
MTUS	67 Neutral	$714.40M	30.62	-3.00%	―	-23.34%	-128.05%
ZEUS	57 Neutral	$365.91M	22.82	2.95%	1.86%	-9.65%	-61.57%
FRD	54 Neutral	$111.12M	18.03	4.66%	1.03%	-13.95%	-63.56%
ACNT	54 Neutral	$136.20M	―	-8.42%	―	-6.70%	61.17%
Sector *	44 Neutral	C$980.54M	-6.83	-13.68%	1.75%	17.37%	-32.98%

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.