GrafTech International (EAF) AI Stock Analysis

• Market Cap: $282.99M
• Dividend Yield: N/A
• Average Volume (3M): 3.37M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: -25.88%
• EPS Growth: -2486.86%
• Country: US
• Employees: 1,249
• Sector: Industrials
• Sector Strength: 66
• Industry: Industrial Goods
• EPS (TTM): -0.51
• Shares Outstanding: 257,263,700
• 10 Day Avg. Volume: 1,581,435
• 30 Day Avg. Volume: 3,367,461
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.55
• Price to Cash Flow (P/CF): -2.80
• P/FCF Ratio: 1.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $1.67
• Price Target Upside: 51.82% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

GrafTech's overall stock score reflects its significant financial challenges, with negative profitability, cash flow issues, and a weak balance sheet. Technical indicators suggest bearish momentum, while valuation metrics are unattractive. The earnings call and corporate events revealed some positive strategic moves, but these are overshadowed by ongoing risks and operational challenges.

Positive Factors

Cost Management

Management has demonstrated its ability to drive material cost downs.

Liquidity

An influx of new money expected later this quarter should extend the liquidity runway well beyond 2025, alleviating a key overhang.

Negative Factors

Trade Policy Risks

There is elevated risk associated with the US potentially implementing tariffs on GrafTech's operations in Mexico and Europe.

GrafTech International Business Overview & Revenue Model

Company Description

GrafTech International (EAF) is a leading manufacturer of high-quality graphite electrode products, essential for the production of electric arc furnace (EAF) steel and other ferrous and non-ferrous metals. With operations spanning various regions, the company serves a diverse range of industries, including construction, automotive, and energy. GrafTech's commitment to innovation and sustainability positions it as a key player in the industrial sector, providing crucial materials that support global manufacturing processes.

How the Company Makes Money

GrafTech International primarily generates revenue through the sale of graphite electrodes, which are critical components in the electric arc furnace (EAF) method of steel production. The demand for these electrodes is closely tied to the steel industry's performance, particularly in regions where EAF steelmaking is prevalent. GrafTech's revenue model is based on long-term agreements with major steel producers, ensuring a stable demand and pricing for its products. Additionally, the company benefits from operational efficiencies and proprietary technologies that enhance its production capabilities, allowing it to maintain a competitive edge in the market. Strategic partnerships and a global distribution network further contribute to GrafTech's financial success by expanding its reach and customer base.

GrafTech International Financial Statement Overview

Summary

GrafTech International is experiencing substantial financial difficulties across all verticals. The income statement shows declining revenue and large losses, while the balance sheet reflects a heavily leveraged position with negative equity. Cash flow challenges further exacerbate the situation, with negative operating and free cash flow. The company faces significant risks and potential instability if these trends continue.

Income Statement

The income statement shows a concerning decline in revenue and profitability. The TTM (Trailing-Twelve-Months) data reveals a negative gross profit margin of -4.15%, indicating that cost of goods sold exceeded revenue. The net profit margin is also negative, at -24.35%, demonstrating significant losses. Revenue has declined substantially from the previous year, with a revenue growth rate of -13.16%. Both EBIT and EBITDA margins are negative, indicating operational challenges.

Balance Sheet

The balance sheet reflects a weak equity position with a negative stockholders' equity of -$78.9 million in TTM. The debt-to-equity ratio cannot be calculated due to negative equity, but high debt levels are evident. The equity ratio stands at -6.44%, highlighting a precarious financial structure with liabilities exceeding assets. Return on Equity (ROE) is also not meaningful due to negative equity.

Cash Flow

The cash flow statement reveals negative operating cash flow of -$40.1 million in TTM, leading to negative free cash flow of -$74.4 million. The free cash flow growth rate is highly negative, showing significant deterioration from the previous year. The operating cash flow to net income ratio is not meaningful due to negative figures, indicating cash flow challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
538.78M	620.50M	1.28B	1.35B	1.22B
	Gross Profit
-19.85M	36.21M	554.88M	644.45M	660.50M
	EBIT
-75.22M	-47.09M	474.26M	508.07M	588.61M
	EBITDA
-19.89M	-145.21M	546.80M	589.04M	666.69M
	Net Income Common Stockholders
-131.16M	-255.25M	382.96M	388.33M	434.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.25M	176.88M	134.64M	57.51M	145.44M
	Total Assets
1.22B	1.29B	1.60B	1.41B	1.43B
	Total Debt
1.14B	930.75M	921.93M	1.03B	1.42B
	Net Debt
879.23M	753.88M	787.29M	972.17M	1.27B
	Total Liabilities
1.30B	1.21B	1.27B	1.39B	1.76B
	Stockholders Equity
-78.90M	78.25M	337.71M	23.40M	-329.38M
Cash Flow		Free Cash Flow
-74.40M	14.37M	252.46M	384.78M	527.57M
	Operating Cash Flow
-40.09M	68.41M	324.63M	443.04M	563.65M
	Investing Cash Flow
-34.21M	-53.82M	-71.97M	-57.86M	-35.70M
	Financing Cash Flow
155.72M	18.71M	-176.27M	-471.79M	-463.68M

GrafTech International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.10
• 50DMA: Negative
• 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 EAF, the sentiment is Negative. The current price of 1.1 is below the 20-day moving average (MA) of 1.13, below the 50-day MA of 1.42, and below the 200-day MA of 1.36, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 38.67 is Neutral, neither overbought nor oversold. The STOCH value of 42.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EAF.

GrafTech International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRS	78 Outperform	$9.00B	34.02	16.82%	0.44%	5.65%	84.17%
NUE	74 Outperform	$29.21B	15.80	9.79%	1.62%	-11.46%	-53.29%
RS	73 Outperform	$15.31B	18.40	11.71%	1.52%	-6.56%	-31.89%
ATI	70 Outperform	$7.26B	19.99	22.82%	―	4.51%	-2.90%
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%
CMC	60 Neutral	$5.21B	41.31	3.24%	1.57%	-8.66%	-82.83%
EAF	38 Underperform	$282.99M	―	-213.73%	―	-25.88%	-2486.86%

GrafTech International Corporate Events

GrafTech International Expands Board with New Director

On March 7, 2025, GrafTech International’s Board of Directors increased its size to nine members by appointing Eric V. Roegner as a Class I director, following a Cooperation Agreement with shareholder Nilesh Undavia. Roegner, who brings significant experience from his roles at Amcor plc and Arconic Inc., was also appointed to the Audit and Human Resources and Compensation Committees. His appointment is expected to enhance the Board’s expertise in managing operations in cyclical industries, aligning with GrafTech’s strategic objectives.

GrafTech International Announces New Board Collaboration

GrafTech International Ltd. has entered into a Cooperation Agreement with stockholder Nilesh Undavia, appointing Sachin Shivaram to its Board of Directors and agreeing to collaborate on nominating an independent director for the 2025 annual meeting. This agreement reflects a constructive engagement with Mr. Undavia and aims to leverage Mr. Shivaram’s expertise in the steel industry to benefit stockholders, while including standstill and voting provisions to ensure alignment during the cooperation period.

GrafTech International’s Chief Legal Officer Resigns

Gina K. Gunning, Chief Legal Officer and Corporate Secretary of GrafTech International Ltd., has announced her resignation effective January 24, 2025, to pursue an opportunity outside the company. This resignation could impact GrafTech’s legal and corporate governance operations as they seek a successor for this key role.

GrafTech International Strengthens Financial Flexibility with New Notes

GrafTech International Ltd. finalized its exchange offers and consent solicitations, replacing existing senior secured notes with new second lien notes due in 2029. This move involved eliminating restrictive covenants and releasing collateral on the existing notes, receiving 99.4% participation from noteholders, signaling strong stakeholder support and potentially strengthening GrafTech’s financial flexibility.