Insteel Industries manufactures and markets steel wire reinforcing products for concrete construction applications. The company was founded in 1958 and is based in Mount Airy, North Carolina.
IIIN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Insteel Industries Inc. To summarize, we found that Insteel Industries Inc ranked in the 90th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 2305%. In terms of the factors that were most noteworthy in this DCF analysis for IIIN, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 100. Notably, its equity weight is greater than 99.27% of US equities in the Industrials sector yielding a positive free cash flow.
The business' balance sheet suggests that 0% of the company's capital is sourced from debt; this is greater than merely 0.05% of the free cash flow producing stocks we're observing.
IIIN's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 59.85% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as IIIN, try HHR, SPLP, NXTD, KE, and CPA.
This is a challenging time to model non-residential construction investment, particularly in the municipal area, as COVID-19 is likely to hammer local and state budgets. On top of that, federal tariff policy remains inconsistent, protecting some companies and leaving other companies more exposed than before. I was cautious on Insteel...
Stephen Simpson, CFA on Seeking Alpha | August 31, 2020
Ladies and gentlemen, thank you for standing by and welcome to the Insteel Industries' Third Quarter 2020 Conference Call. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions]. Today's call is being hosted by H. Woltz, President and Chief Executive Officer; and Mark Carano, Vice President, CFO and Treasurer.
Shares of Insteel Industries (NASDAQ:IIIN) remained unaffected after the company reported Q3 results.Quarterly Results Earnings per share rose 172.73% over the past year to $0.30, which beat the estimate of $0.17.Revenue of $121,959,000 decreased by 3.40% year over year, which beat the estimate of $115,450,000.Outlook Earnings guidance hasn't been issued by the company for now.Revenue guidance hasn't been issued by the company for now.Conference Call Details Date: Jul 16, 2020View more earnings on IIINTime: 10:00 AMET Webcast URL: https://edge.media-server.com/mmc/p/f2ue8dcqTechnicals Company's 52-week high was at $26.61Company's 52-week low was at $10.00Price action over last quarter: Up 15.79%Company Description Insteel Industries Inc manufactures steel wire reinforcin...