Steel Dynamics Valuation

STLD Stock  USD 148.23  1.70  1.16%   
At this time, the company appears to be undervalued. Steel Dynamics has a current Real Value of $164.0 per share. The regular price of the company is $148.23. Our model measures the value of Steel Dynamics from inspecting the company fundamentals such as Return On Equity of 0.29, operating margin of 0.12 %, and Shares Outstanding of 158.16 M as well as reviewing its technical indicators and probability of bankruptcy. In general, most investors recommend purchasing undervalued stocks and exiting overvalued stocks since, at some point, asset prices and their ongoing real values will draw towards each other.
Price Book
2.6219
Enterprise Value
24.2 B
Enterprise Value Ebitda
6.4813
Price Sales
1.2369
Forward PE
11.919
Undervalued
Today
148.23
Please note that Steel Dynamics' price fluctuation is very steady at this time. Calculation of the real value of Steel Dynamics is based on 3 months time horizon. Increasing Steel Dynamics' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Steel Dynamics is useful when determining the fair value of the Steel stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Steel Dynamics. Since Steel Dynamics is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Steel Stock. However, Steel Dynamics' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
Historical Market  148.23 Real  164.0 Target  108.0 Hype  148.23 Naive  149.75
The real value of Steel Stock, also known as its intrinsic value, is the underlying worth of Steel Dynamics Company, which is reflected in its stock price. It is based on Steel Dynamics' financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Steel Dynamics' stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Steel Dynamics' stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
133.41
Downside
164.00
Real Value
165.65
Upside
Estimating the potential upside or downside of Steel Dynamics helps investors to forecast how Steel stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Steel Dynamics more accurately as focusing exclusively on Steel Dynamics' fundamentals will not take into account other important factors:
Earnings
Estimates (0)
LowProjectedHigh
2.903.423.58
Details
Hype
Prediction
LowEstimatedHigh
146.58148.23149.88
Details
Potential
Annual Dividend
LowForecastedHigh
1.041.051.06
Details
12 Analysts
Consensus
LowTarget PriceHigh
98.28108.00119.88
Details

Steel Dynamics Investments

(1.62 Billion)

Steel Dynamics Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Steel Dynamics's current stock value. Our valuation model uses many indicators to compare Steel Dynamics value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Steel Dynamics competition to find correlations between indicators driving Steel Dynamics's intrinsic value. More Info.
Steel Dynamics is rated fourth in five year return category among related companies. It is rated third in price to sales category among related companies fabricating about  0.55  of Price To Sales per Five Year Return. The ratio of Five Year Return to Price To Sales for Steel Dynamics is roughly  1.80 . As of March 29, 2024, Price To Sales Ratio is expected to decline to 0.99. Comparative valuation analysis is a catch-all model that can be used if you cannot value Steel Dynamics by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Steel Dynamics' Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Steel Dynamics' earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Steel Dynamics' worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Steel Dynamics and how it compares across the competition.

About Steel Dynamics Valuation

The stock valuation mechanism determines the current worth of Steel Dynamics on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Steel Dynamics. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Steel Dynamics based exclusively on its fundamental and basic technical indicators. By analyzing Steel Dynamics's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Steel Dynamics's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Steel Dynamics. We calculate exposure to Steel Dynamics's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Steel Dynamics's related companies.
Last ReportedProjected for 2024
Gross ProfitB4.2 B
Pretax Profit Margin 0.17  0.18 
Operating Profit Margin 0.17  0.13 
Net Profit Margin 0.13  0.14 
Gross Profit Margin 0.20  0.21 

8 Steps to conduct Steel Dynamics' Valuation Analysis

Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Steel Dynamics' potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Steel Dynamics' valuation analysis, follow these 8 steps:
  • Gather financial information: Obtain Steel Dynamics' financial statements, including balance sheets, income statements, and cash flow statements.
  • Determine Steel Dynamics' revenue streams: Identify Steel Dynamics' primary sources of revenue, including products or services offered, target markets, and pricing strategies.
  • Analyze market data: Research Steel Dynamics' industry and market trends, including the size of the market, growth rate, and competition.
  • Establish Steel Dynamics' growth potential: Evaluate Steel Dynamics' management, business model, and growth potential.
  • Determine Steel Dynamics' financial performance: Analyze its financial statements to assess its historical performance and future potential.
  • Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
  • Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Steel Dynamics' estimated value.
  • Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
Note: This is a general outline, and different approaches and methods may be used depending on the type and size of the company being valued. We also recomment to seek professional assistance to ensure accuracy.
Steel Dynamics' stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Steel Dynamics' value is low or high relative to the company's performance and growth projections. Determining the market value of Steel Dynamics can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Steel Dynamics represents a small ownership stake in the entity. As a stockholder of Steel, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Steel Dynamics Dividends Analysis For Valuation

At present, Steel Dynamics' Dividend Payout Ratio is projected to slightly decrease based on the last few years of reporting. . At present, Steel Dynamics' Retained Earnings Total Equity is projected to increase significantly based on the last few years of reporting. The current year's Price Earnings Ratio is expected to grow to 8.43, whereas Price Earnings To Growth Ratio is projected to grow to (0.25).
Last ReportedProjected for 2024
Dividends Paid-271.3 M-257.8 M
Dividend Yield 0.01  0.02 
Dividend Payout Ratio 0.11  0.12 
Dividend Paid And Capex Coverage Ratio(2.54)(2.67)
There are various types of dividends Steel Dynamics can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Steel shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Steel Dynamics directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Steel pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Steel Dynamics by the value of the dividends paid out.

Steel Dynamics Growth Indicators

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Steel Dynamics does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Common Stock Shares Outstanding167.4 M
Quarterly Earnings Growth Y O Y-0.275
Forward Price Earnings11.919

Steel Dynamics Current Valuation Indicators

Valuation refers to the process of determining the present value of Steel Dynamics and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Steel we look at many different elements of the entity such as Steel's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Steel Dynamics' valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Steel Dynamics' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Steel Dynamics, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Steel Dynamics' valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Steel Dynamics' worth.
When determining whether Steel Dynamics is a strong investment it is important to analyze Steel Dynamics' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Steel Dynamics' future performance. For an informed investment choice regarding Steel Stock, refer to the following important reports:
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Steel Dynamics. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis.
For information on how to trade Steel Stock refer to our How to Trade Steel Stock guide.
You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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When running Steel Dynamics' price analysis, check to measure Steel Dynamics' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Steel Dynamics is operating at the current time. Most of Steel Dynamics' value examination focuses on studying past and present price action to predict the probability of Steel Dynamics' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Steel Dynamics' price. Additionally, you may evaluate how the addition of Steel Dynamics to your portfolios can decrease your overall portfolio volatility.
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Is Steel Dynamics' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Steel Dynamics. If investors know Steel will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Steel Dynamics listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.28)
Dividend Share
1.7
Earnings Share
14.64
Revenue Per Share
112.85
Quarterly Revenue Growth
(0.12)
The market value of Steel Dynamics is measured differently than its book value, which is the value of Steel that is recorded on the company's balance sheet. Investors also form their own opinion of Steel Dynamics' value that differs from its market value or its book value, called intrinsic value, which is Steel Dynamics' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Steel Dynamics' market value can be influenced by many factors that don't directly affect Steel Dynamics' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Steel Dynamics' value and its price as these two are different measures arrived at by different means. Investors typically determine if Steel Dynamics is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Steel Dynamics' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.