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Companhia Siderúrgica Nacional (SID)
NYSE:SID

Companhia Siderúrgica Nacional (SID) AI Stock Analysis

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SI

Companhia Siderúrgica Nacional

(NYSE:SID)

55Neutral
The overall score reflects the company's financial challenges, particularly with declining revenues and increased leverage, balanced by operational strengths and strategic cash management. Technical indicators suggest bearish sentiment, while valuation is mixed with a high dividend yield but negative P/E ratio. The positive outlook from the earnings call provides some optimism.

Companhia Siderúrgica Nacional (SID) vs. S&P 500 (SPY)

Companhia Siderúrgica Nacional Business Overview & Revenue Model

Company DescriptionCompanhia Siderúrgica Nacional (SID) is a prominent Brazilian steelmaker and one of the largest industrial conglomerates in Latin America. Established in 1941, the company is headquartered in São Paulo, Brazil. CSN operates across multiple sectors including steel production, mining, logistics, cement, and energy. Its core products and services include flat steel products, tinplate, and long steel products, which are primarily used in the automotive, construction, packaging, and home appliances industries.
How the Company Makes MoneyCSN primarily generates revenue through the production and sale of steel products. The company's revenue model is centered around its integrated steel mill, which allows it to produce a wide range of steel products efficiently. Key revenue streams include the sale of flat steel products, such as hot and cold-rolled coils and sheets, and tinplate, which is used for packaging applications. Additionally, CSN earns significant income from its mining operations, particularly iron ore extraction, which supplies raw material for its steel production and is also sold in international markets. The logistics sector contributes to earnings by providing transportation and port services, enhancing the efficiency of CSN's supply chain. Furthermore, CSN's ventures in cement production and energy generation diversify its revenue sources, leveraging by-products from its steel-making operations and utilizing its energy assets to support operational needs and sell excess capacity. Strategic partnerships and investments in technology and infrastructure also play a crucial role in optimizing production processes and expanding market reach, contributing to the company's financial performance.

Companhia Siderúrgica Nacional Financial Statement Overview

Summary
Companhia Siderúrgica Nacional is facing declining revenues and profitability issues in the TTM period, with operational efficiency and cash flow generation as relative strengths. However, increased leverage and decreased equity raise concerns about financial stability.
Income Statement
55
Neutral
The company has experienced declining revenues from 2021 to TTM (Trailing-Twelve-Months), indicating potential challenges in maintaining sales volumes or pricing power. The gross profit margin has decreased, reflecting tighter cost management or reduced pricing power. EBIT and EBITDA margins remain relatively stable, suggesting some operational efficiency. However, the negative net income in the TTM period is concerning, indicating profitability issues.
Balance Sheet
60
Neutral
The debt-to-equity ratio has increased, indicating higher financial leverage and potential risk if earnings do not improve. Stockholders' equity has declined from 2021, weakening the equity position. The company's equity ratio is stable but on the lower side, indicating a higher proportion of assets financed by debt. Return on equity has deteriorated significantly, presenting a challenge for shareholder value creation.
Cash Flow
65
Positive
Operating cash flow remains positive, indicating some ability to generate cash from operations. However, free cash flow has decreased from previous periods, limiting flexibility for investments or debt repayment. The ratio of operating cash flow to net income is not meaningful due to negative net income in the TTM period, but the company has managed to maintain some level of free cash flow despite earnings challenges.
Breakdown
TTMDec 2023Dec 2022Dec 2021Dec 2020Dec 2019
Income StatementTotal Revenue
43.67B45.44B44.36B47.91B30.06B25.44B
Gross Profit
11.42B11.30B13.31B22.07B10.94B8.17B
EBIT
5.18B5.19B7.40B18.50B7.53B4.22B
EBITDA
8.68B8.58B10.07B23.08B9.69B5.74B
Net Income Common Stockholders
-1.38B-318.21M2.17B12.26B3.79B1.79B
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.14B17.59B13.45B19.30B13.73B3.73B
Total Assets
47.33B91.53B85.35B79.38B63.00B50.87B
Total Debt
28.83B45.59B41.61B33.12B35.80B28.44B
Net Debt
26.58B29.55B29.62B16.47B25.86B27.35B
Total Liabilities
37.31B71.84B63.54B56.00B51.75B39.51B
Stockholders Equity
8.70B17.50B19.49B20.31B9.91B10.17B
Cash FlowFree Cash Flow
1.76B2.88B-3.33B13.57B7.89B2.66B
Operating Cash Flow
6.76B7.29B2.04B16.43B9.58B4.87B
Investing Cash Flow
-5.20B-4.59B-11.45B447.93M-1.86B-2.24B
Financing Cash Flow
1.71B1.32B4.75B-8.53B1.19B-3.79B

Companhia Siderúrgica Nacional Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.78
Price Trends
50DMA
1.49
Positive
100DMA
1.66
Positive
200DMA
1.90
Negative
Market Momentum
MACD
0.02
Negative
RSI
69.20
Neutral
STOCH
83.13
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SID, the sentiment is Positive. The current price of 1.78 is above the 20-day moving average (MA) of 1.52, above the 50-day MA of 1.49, and below the 200-day MA of 1.90, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 69.20 is Neutral, neither overbought nor oversold. The STOCH value of 83.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SID.

Companhia Siderúrgica Nacional Risk Analysis

Companhia Siderúrgica Nacional disclosed 41 risk factors in its most recent earnings report. Companhia Siderúrgica Nacional reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Companhia Siderúrgica Nacional Peers Comparison

Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
MTMT
73
Outperform
$26.57B18.132.60%1.32%-8.56%68.36%
NUNUE
72
Outperform
$30.45B15.319.79%1.67%-11.46%-53.33%
72
Outperform
$19.09B12.5217.27%1.49%-6.68%-32.96%
SISID
55
Neutral
$2.35B-17.19%13.26%-3.74%-50.39%
CLCLF
49
Neutral
$5.14B-10.36%-12.78%-301.57%
XX
49
Neutral
$8.78B24.013.43%0.53%-13.48%-56.94%
47
Neutral
$2.64B-3.98-26.97%3.35%2.55%-29.66%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SID
Companhia Siderúrgica Nacional
1.78
-1.02
-36.43%
MT
ArcelorMittal
32.22
6.20
23.83%
CLF
Cleveland-Cliffs
10.39
-9.68
-48.23%
NUE
Nucor
132.09
-54.95
-29.38%
STLD
Steel Dynamics
127.14
-10.80
-7.83%
X
United States Steel
39.00
0.33
0.85%

Companhia Siderúrgica Nacional Earnings Call Summary

Earnings Call Date: Mar 12, 2025 | % Change Since: 21.92% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performances and record achievements in cash holdings, mining, steel, and cement segments, along with significant ESG advancements. However, the call also noted challenges such as the impact of exchange rates on debt, negative cash flow despite operational success, and the strategic decision to withhold dividend distribution. Additionally, there are concerns about market dynamics in the steel sector, particularly related to imports and protectionist measures.
Highlights
Record Cash Holdings
CSN achieved the highest cash holdings in its history, almost reaching BRL 25 billion, enabling better control over the company's leveraging.
Strong Mining Segment Performance
The mining segment confirmed operational excellence, achieving production guidance despite adverse weather, and experienced a 35% price increase leading to an EBITDA margin above 50%.
Steel Segment Recovery
The steel segment saw a 10% increase in sales compared to the previous year, with EBITDA margins reaching 11% for the first time in the year, indicating a recovery trend.
Cement Segment Record Margins
CSN Cement achieved a record EBITDA margin of 33%, the highest since acquiring Lafarge Holcim, outperforming market averages.
ESG Achievements
CSN reported no fatalities, a 63% reduction in lost days, and a 7% reduction in CO2 emissions in the steel mill, bringing them closer to their 2030 goals.
Lowlights
Exchange Rate Impact on Debt
The leverage increased due to exchange rate variations on dollar-denominated debt, impacting the financial results despite operational improvements.
Negative Cash Flow Despite Strong Operations
Despite strong operational results, CSN experienced a negative cash flow due to financial expenses affected by exchange rate effects and high investment volumes.
Decision to Not Distribute Dividends
CSN decided not to distribute dividends in the first quarter of 2025 to focus on deleveraging, as approved by the Board.
Anticipated Challenges in Steel Market
Concerns were raised about the impact of protectionist measures and unloyal competition from imports, particularly from China, affecting the steel market.
Company Guidance
In the call, CSN reported strong performance for the fourth quarter and full year 2024, highlighting significant metrics such as achieving the highest cash in its history at nearly BRL25 billion. The company emphasized its operational excellence in mining, evidenced by a 35% price increase and an EBITDA margin over 50%. In steel, CSN saw a 10% increase in sales compared to the same period last year, leading to an EBITDA margin of 11% in the fourth quarter. The cement segment reached a record EBITDA margin of 33%, the highest since acquiring Lafarge Holcim. CSN also detailed its commitment to deleveraging, with a semester-end leverage ratio impacted by exchange rate variations but operationally closer to 3.2 times. The company's strategy includes capital recycling and a focus on organic growth, postponing dividend distributions to prioritize deleveraging. CSN's guidance for 2025 includes continued operational improvements and strategic investments to foster growth and maintain financial health.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.