Steel Dynamics (STLD) Dips More Than Broader Market: What You Should Know

Steel Dynamics (STLD) closed the most recent trading day at $242.06, moving -1.61% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.38%. Elsewhere, the Dow lost 0.51%, while the tech-heavy Nasdaq lost 0.29%.

Shares of the steel producer and metals recycler witnessed a loss of 5.91% over the previous month, trailing the performance of the Basic Materials sector with its gain of 11.88%, and the S&P 500's gain of 2.08%.

Market participants will be closely following the financial results of Steel Dynamics in its upcoming release. The company's upcoming EPS is projected at $5.71, signifying a 108.39% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.15 billion, up 27.4% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $17.14 per share and revenue of $23.37 billion. These totals would mark changes of +114.52% and +28.59%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Steel Dynamics. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Steel Dynamics is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Steel Dynamics's current valuation metrics, including its Forward P/E ratio of 14.36. Its industry sports an average Forward P/E of 14.49, so one might conclude that Steel Dynamics is trading at a discount comparatively.

Investors should also note that STLD has a PEG ratio of 0.47 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Steel - Producers industry currently had an average PEG ratio of 0.47 as of yesterday's close.

The Steel - Producers industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 157, finds itself in the bottom 37% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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

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