Steel Dynamics (STLD) Gains As Market Dips: What You Should Know

Steel Dynamics (STLD) closed at $235.90 in the latest trading session, marking a +2.09% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.02%. Meanwhile, the Dow experienced a drop of 0.21%, and the technology-dominated Nasdaq saw a decrease of 0.08%.

Heading into today, shares of the steel producer and metals recycler had lost 11.03% over the past month, lagging the Basic Materials sector's gain of 16.56% and the S&P 500's gain of 3.67%.

Analysts and investors alike will be keeping a close eye on the performance of Steel Dynamics in its upcoming earnings disclosure. On that day, Steel Dynamics is projected to report earnings of $5.71 per share, which would represent year-over-year growth of 108.39%. Our most recent consensus estimate is calling for quarterly revenue of $6.15 billion, up 27.4% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $17.14 per share and a revenue of $23.37 billion, demonstrating changes of +114.52% and +28.59%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Steel Dynamics. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Steel Dynamics holds a Zacks Rank of #3 (Hold).

In terms of valuation, Steel Dynamics is currently trading at a Forward P/E ratio of 13.48. For comparison, its industry has an average Forward P/E of 13.82, which means Steel Dynamics is trading at a discount to the group.

Investors should also note that STLD has a PEG ratio of 0.44 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Steel - Producers was holding an average PEG ratio of 0.44 at yesterday's closing price.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 86, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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