(STLD) Steel Dynamics - Ratings and Ratios

Steel Dynamics, Inc. (NASDAQ:STLD) is a leading steel producer and metal recycler in the United States, operating through four distinct business segments: Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Aluminum Operations. The company was founded in 1993 and is headquartered in Fort Wayne, Indiana.

The Steel Operations segment produces a wide range of steel products, including hot-rolled, cold-rolled, and coated steel offerings. It also manufactures structural steel products such as parallel flange beams, channel sections, and reinforcing steel bars, catering to industries like construction, automotive, and energy. Additionally, this segment provides specialized steel solutions, including engineered bar-quality products and precision processing services like cutting, heat treating, and finishing.

The Metals Recycling Operations segment focuses on ferrous and nonferrous scrap metal processing. It collects, processes, and markets scrap metals, offering products such as heavy melting steel, shredded scrap, and nonferrous metals like aluminum, copper, and stainless steel. This segment plays a critical role in the circular economy by recycling and repurposing metal waste.

The Steel Fabrication Operations segment specializes in manufacturing steel components for non-residential construction. Its product portfolio includes steel joists, girders, and deck products, serving contractors, developers, and governmental entities. This segment leverages its expertise in steel fabrication to provide customized solutions for building projects.

The Aluminum Operations segment rounds out the company’s offerings by producing recycled aluminum flat-rolled products. This segment underscores Steel Dynamics’ commitment to sustainability by utilizing recycled materials to create high-quality aluminum products.

Steel Dynamics exports its products globally, further diversifying its revenue streams. With a market capitalization of $17.73 billion, the company operates with a price-to-earnings ratio of 12.02 and a return on equity of 17.20%, indicating strong profitability. Its price-to-sales ratio of 1.01 reflects efficient revenue generation relative to its market value.

3-Month Forecast (Using Technical and Fundamental Data):

Based on technical indicators, STLD’s price is currently below its 20-day, 50-day, and 200-day moving averages (SMA), suggesting potential bearish momentum. The average true range (ATR) of 5.56 indicates moderate volatility, which could lead to price swings in either direction. However, the forward P/E of 11.86 signals expectations of stable earnings growth, supported by a P/B ratio of 1.98, which is near its historical average.

Fundamentally, the company’s ability to maintain a return on equity (RoE) of 17.20% highlights operational efficiency. However, rising interest rates and potential fluctuations in raw material costs could impact margins. The stock’s valuation appears reasonable given its P/S ratio of 1.01, but investors should monitor economic indicators and industry demand trends over the next quarter.