Steel Dynamics manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally. The company was founded in 1993 and is based in Fort Wayne, Indiana.
STLD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Steel Dynamics Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Steel Dynamics Inc ranked in the 90th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 1673.5% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for STLD, they are:
As a business, STLD is generating more cash flow than 85.81% of positive cash flow stocks in the Basic Materials.
Steel Dynamics Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 12.76% of tickers in our DCF set.
STLD's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than only 12.76% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GMS, TECK, MEOH, BAK, and HDSN can be thought of as valuation peers to STLD, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.