Steel Dynamics Inc (STLD, Financial) has recently captured the attention of investors and financial analysts, thanks to its strong financial performance. With a current share price of $118.93 and a daily gain of 3.31%, despite a three-month decline of -5.24%, the company shows promising signs of substantial growth. A detailed analysis using the GF Score indicates that Steel Dynamics Inc is poised for significant future success.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects have shown a strong correlation with long-term stock performance from 2006 to 2021. A higher GF Score typically indicates a higher potential for returns. The components of the GF Score include Financial Strength, Profitability, Growth, GF Value, and Momentum, each contributing differently to the total score based on their impact on stock performance.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 5/10
- Momentum rank: 7/10
With an impressive GF Score of 92 out of 100, Steel Dynamics Inc demonstrates a high potential for outperformance.
Understanding Steel Dynamics Inc's Business
Steel Dynamics Inc operates scrap-based steel minimills and boasts an annual steel production capacity of approximately 16 million tons. The company's operations are segmented into steel operations, metals recycling, steel fabrication, and aluminum operations, among others. With a market cap of $18.35 billion and sales amounting to $18.15 billion, Steel Dynamics Inc primarily generates revenue from its steel operations segment, supported by a robust operating margin of 15.34%.
Financial Strength Breakdown
Steel Dynamics Inc's Financial Strength is evident in its balance sheet, showcasing resilience against market volatility. The company's Interest Coverage ratio stands at an impressive 48.08, indicating strong capability to meet interest obligations. Furthermore, with an Altman Z-Score of 5.21, Steel Dynamics Inc is well-protected against financial distress. The strategic management of its debt, reflected by a Debt-to-Revenue ratio of 0.17, further solidifies its financial health.
Profitability and Growth Metrics
Steel Dynamics Inc's Profitability Rank is impressive, with significant improvements in its Operating Margin and Gross Margin over the past five years. The company's commitment to growth is also evident, with a Growth Rank of 9/10 and a 3-Year Revenue Growth Rate of 35.4%, outperforming 90.39% of its industry peers.
Conclusion
Considering Steel Dynamics Inc's robust financial strength, impressive profitability, and strong growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors seeking similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
