Commercial Metals Company (CMC) AI Stock Analysis

• Market Cap: $5.13B
• Dividend Yield: 1.59%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 75.8
• Beta (1Y): 1.19
• Revenue Growth: -7.93%
• EPS Growth: -89.29%
• Country: US
• Employees: 13,178
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Steel
• EPS (TTM): 0.26
• Shares Outstanding: 113,000,580
• 10 Day Avg. Volume: 804,479
• 30 Day Avg. Volume: 1,173,009
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.40
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $52.20
• Price Target Upside: 13.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

CMC's overall score reflects strong operational efficiency and a solid balance sheet, but profitability challenges and liquidity risks are notable concerns. Technical indicators suggest a stable trend, although valuation issues due to a high P/E ratio weigh on the stock. The earnings call and bond issuance provide a cautiously optimistic outlook, but economic uncertainties and execution challenges remain.

Positive Factors

Cost-Cutting Initiatives

The Transform, Advance, and Grow (TAG) program is gaining momentum, with significant potential to further lower costs and capture commercial benefits.

Earnings

3Q FY25 earnings are expected to increase, largely due to rising North American shipments and margins.

Infrastructure Investment

Infrastructure activity should continue to see robust growth with a significant portion of the IIJA funds yet to be spent.

Negative Factors

Earnings Decline

CMC expects consolidated results will decline sequentially in 2Q/FY25 on seasonally lower volumes and further margin compression in NA, and ongoing weakness in Europe.

Free Cash Flow

Lower earnings and a seasonal build in working capital led to negative free cash flow for CMC during the quarter.

Market Softness

The current market softness and elevated capex spending keeps analysts on the sidelines.

Commercial Metals Company Business Overview & Revenue Model

Company Description

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including rebar, merchant bar, light structural, and other special sections, as well as semi-finished billets for re-rolling and forging applications. In addition, the company provides fabricated steel products used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.

How the Company Makes Money

Commercial Metals Company generates revenue through several key streams: the sale of steel and metal products, metal recycling services, and fabrication services. The company operates steel mills, mini-mills, and fabricating plants that produce a wide variety of steel products which are sold to construction companies, manufacturers, and other industrial clients. CMC's recycling segment collects, processes, and resells scrap metal, providing raw materials for its steel production and generating additional revenue. Strategic partnerships and a strong supply chain further enhance CMC's market reach and profitability. The company's earnings are influenced by factors such as steel demand, commodity prices, and operational efficiency.

Commercial Metals Company Financial Statement Overview

Summary

Commercial Metals Company demonstrates strong operational efficiency and a solid balance sheet with low leverage. However, profitability has weakened, reflected in declining net profit margins and inconsistent revenue growth. Cash flow generation remains robust, although recent declines in free cash flow growth suggest potential liquidity risks.

Income Statement

The company demonstrates a strong gross profit margin of 35.45% TTM, reflecting efficient cost management in production. However, the net profit margin has declined significantly to 0.95% TTM, indicating increased expenses or reduced revenue. Revenue growth has been inconsistent, with a decline of 10.88% in the latest annual report. The EBIT margin is robust at 24.98% TTM, suggesting good operational efficiency.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.30, indicating low leverage and financial stability. Return on equity is modest at 1.82% TTM, showing room for improvement in profitability. The equity ratio stands at 59.99% TTM, suggesting a solid capital structure with a good portion of assets financed by equity.

Cash Flow

Operating cash flow to net income ratio is high at 10.87 TTM, reflecting strong cash generation relative to profits. Free cash flow growth is negative at -25.75%, indicating potential challenges in maintaining liquidity. The free cash flow to net income ratio is 5.84 TTM, showing efficient conversion of earnings into cash.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
7.93B	8.80B	8.91B	6.73B	5.48B
	Gross Profit
1.36B	1.81B	1.86B	1.11B	944.80M
	EBIT
693.60M	1.17B	1.31B	600.74M	441.02M
	EBITDA
963.93M	1.39B	1.49B	753.53M	598.37M
	Net Income Common Stockholders
485.49M	859.76M	1.22B	412.87M	279.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
857.92M	592.33M	672.60M	497.75M	542.10M
	Total Assets
6.82B	6.64B	6.24B	4.64B	4.08B
	Total Debt
1.19B	1.15B	1.50B	1.07B	1.08B
	Net Debt
331.70M	562.47M	829.45M	572.04M	541.58M
	Total Liabilities
2.52B	2.52B	2.95B	2.34B	2.19B
	Stockholders Equity
4.30B	4.12B	3.29B	2.29B	1.89B
Cash Flow		Free Cash Flow
575.44M	737.44M	250.32M	44.31M	603.59M
	Operating Cash Flow
899.71M	1.34B	700.31M	228.47M	791.20M
	Investing Cash Flow
-323.00M	-835.23M	-684.72M	-162.13M	-192.94M
	Financing Cash Flow
-313.76M	-599.48M	165.31M	-109.39M	-247.79M

Commercial Metals Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 46.15
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMC, the sentiment is Neutral. The current price of 46.15 is above the 20-day moving average (MA) of 43.64, above the 50-day MA of 44.95, and below the 200-day MA of 51.39, indicating a neutral trend. The MACD of 0.23 indicates Negative momentum. The RSI at 52.80 is Neutral, neither overbought nor oversold. The STOCH value of 60.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CMC.

Commercial Metals Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	78 Outperform	$4.48B	6.96	21.65%	―	-20.47%	113.07%
GGB	70 Outperform	$5.21B	8.99	5.86%	5.50%	-9.33%	-51.03%
CMC	68 Neutral	$5.13B	75.77	1.78%	1.59%	-7.93%	-89.29%
X	60 Neutral	$9.57B	145.59	0.86%	0.49%	-14.79%	-88.78%
TX	58 Neutral	$5.77B	73.52	-2.75%	10.67%	-10.20%	-152.17%
SID	55 Neutral	$2.16B	―	-17.19%	12.54%	-10.94%	-756.50%
Sector *	49 Neutral	$1.96B	-1.23	-21.20%	3.72%	0.95%	-28.96%

Commercial Metals Company Corporate Events

Commercial Metals Prices $150M Bonds for Waste Facilities

On May 6, 2025, Commercial Metals Company announced the pricing of $150 million in Solid Waste Disposal Facility Revenue Bonds, Series 2025, through the West Virginia Economic Development Authority. The proceeds from these bonds will finance the construction of solid waste disposal facilities in Berkeley County, West Virginia, with the bonds maturing in 2055 and bearing an interest rate of 4.625% per annum. This move is expected to impact CMC’s operations by supporting its infrastructure projects and reinforcing its market position in sustainable construction solutions.

Spark’s Take on CMC Stock

According to Spark, TipRanks’ AI Analyst, CMC is a Neutral.

CMC has strong operational efficiency and a solid balance sheet, but faces profitability challenges and potential liquidity risks. The stock’s valuation is high, raising concerns about overvaluation. Despite these challenges, technical indicators suggest a stable trend, and the earnings call offers a cautiously optimistic outlook due to strategic initiatives and expected market improvements.

To see Spark’s full report on CMC stock, click here.

Commercial Metals Reports Q2 2025 Financial Results

On March 20, 2025, Commercial Metals Company reported its financial results for the second quarter of fiscal year 2025, highlighting net earnings of $25.5 million on net sales of $1.8 billion. The company experienced a 3.3% increase in finished steel shipments in North America due to strong construction demand, while its Europe Steel Group achieved breakeven adjusted EBITDA through effective cost management. Despite a decrease in adjusted EBITDA for the North America Steel Group, the company anticipates improved profitability in the upcoming quarters, driven by infrastructure spending and strategic initiatives like the Transform, Advance, and Grow program.