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Worthington Industries (WOR)
NYSE:WOR
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Worthington Industries
(NYSE:WOR)
66Neutral
Positive Factors
Financial Performance
Strong FQ3 results were reported in the fifth 'clean' reporting quarter without the separated steel business.
Market Perception
Worthington Enterprises stock is believed to be undervalued by 20% to 40%, suggesting potential for stock price appreciation.
Negative Factors
Debt Reserve Impact
The segment was also impacted by $2m of an increased bad debt reserve due to two customers who recently declared bankruptcy.
Market Reaction
Today's stock move appears to be a bit overdone given it was a 'less bad' quarter.
Sales Performance
Consumer Products’ sales were down -2% y-o-y in Q2.
Worthington Industries (WOR) vs. S&P 500 (SPY)
Market Cap
$2.53B
Dividend Yield1.31%
Average Volume (3M)486.36K
Price to Earnings (P/E)42.3
Beta (1Y)0.99
Revenue Growth-69.82%
EPS Growth-78.10%
CountryUS
Employees6,000
SectorIndustrials
Sector Strength65
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)1.19
Shares Outstanding50,044,033
10 Day Avg. Volume823,185
30 Day Avg. Volume486,356
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.71
Price to Cash Flow (P/CF)10.20
P/FCF Ratio10.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.50Price Target Upside8.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Worthington Industries Business Overview & Revenue Model
Company DescriptionWorthington Industries, Inc., an industrial manufacturing company, focuses on value-added steel processing, manufactured consumer, building, and sustainable mobility products in North America and internationally. It operates through Steel Processing, Consumer Products, Building Products, and Sustainable Energy Solutions segments. The Steel Processing segment processes flat-rolled steel for customers primarily in the automotive, aerospace, agricultural, appliance, construction, container, energy, hardware, heavy-truck, HVAC, lawn and garden, leisure and recreation, office furniture, and office equipment markets. It also toll processes steel for steel mills, large end-users, service centers, and other processors. The Consumer Products segment sells tools, outdoor living, and celebrations products under the Coleman, Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, Hawkeye, Worthington Pro Grade, and Level5 brand names. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products to gas producers and distributors. The Sustainable Energy Solutions segment offers on-board fueling systems and services, as well as gas containment solutions and services for the storage, transport, and distribution of industrial gases. The company was founded in 1955 and is headquartered in Columbus, Ohio.
How the Company Makes MoneyWorthington Industries generates revenue primarily through its two main segments: Steel Processing and Pressure Cylinders. In the Steel Processing segment, the company earns money by purchasing raw steel, which is then processed and sold as customized steel products to various industries, including automotive, construction, and industrial. This involves services like slitting, cutting, and blanking steel to meet specific customer requirements. In the Pressure Cylinders segment, revenue is driven by the manufacturing and sale of products such as industrial gas cylinders, consumer products like propane cylinders, and alternative fuel cylinders. The company benefits from long-standing relationships with key clients and partners in these industries, which helps ensure a steady demand for its products. Additionally, Worthington Industries invests in innovation and operational efficiencies to maintain competitive pricing and high product quality, further securing its revenue streams.
Worthington Industries Financial Statement Overview
Summary
Worthington Industries shows strength in cash flow generation and a stable balance sheet with low leverage. While profitability metrics are solid, revenue growth has been a concern. The company remains financially stable with strong operational efficiencies, providing a positive outlook despite some revenue decline.Income Statement
The TTM (Trailing-Twelve-Months) gross profit margin is 26.31%, indicating strong cost management, while the net profit margin is 5.23%, reflecting moderate profitability. However, the revenue has decreased compared to the previous annual period, showing a declining trend. The EBIT margin is low at 2.13%, but EBITDA margin remains stable at 9.04%, suggesting operational efficiency.70
Positive
Balance Sheet
The debt-to-equity ratio is 0.34, showing a conservative leverage position relative to equity. Return on equity (ROE) is 6.43%, demonstrating modest profitability. The equity ratio is 55.79%, indicating financial stability with a solid asset base funded by equity.65
Positive
Cash Flow
The free cash flow has grown significantly over the TTM (Trailing-Twelve-Months), indicating strong cash generation. The operating cash flow to net income ratio is 3.19, reflecting strong cash flow relative to profitability. The free cash flow to net income ratio is 3.00, demonstrating efficient conversion of earnings into cash.75
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.15B | 1.25B | 4.92B | 5.24B | 3.17B | 3.06B | Gross Profit |
| 303.90M | 285.02M | 663.31M | 714.82M | 639.08M | 443.34M | EBIT |
| 24.58M | -73.46M | 394.20M | 531.60M | 1.02B | 239.17M | EBITDA |
| 104.37M | 156.49M | 149.27M | 643.81M | 375.59M | 235.03M | Net Income Common Stockholders |
| 60.39M | 110.62M | 256.53M | 379.39M | 723.79M | 78.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 54.69M | 244.22M | 454.95M | 34.48M | 640.31M | 147.20M | Total Assets |
| 1.40B | 1.64B | 3.65B | 3.64B | 3.37B | 2.33B | Total Debt |
| 220.40M | 317.18M | 795.38M | 844.41M | 747.81M | 736.28M | Net Debt |
| 165.71M | 72.95M | 340.44M | 809.92M | 107.50M | 589.08M | Total Liabilities |
| 669.50M | 747.63M | 1.83B | 2.03B | 1.82B | 1.37B | Stockholders Equity |
| 697.18M | 888.88M | 1.70B | 1.48B | 1.40B | 820.82M |
| Cash Flow | Free Cash Flow | ||||
| 181.16M | 206.45M | 539.00M | -24.49M | 192.20M | 241.22M | Operating Cash Flow |
| 192.50M | 289.98M | 625.36M | 70.11M | 274.38M | 336.73M | Investing Cash Flow |
| -139.38M | -140.81M | -71.78M | -438.19M | 468.51M | -116.22M | Financing Cash Flow |
| -57.58M | -359.89M | -133.13M | -237.75M | -249.78M | -165.68M |
Worthington Industries Technical Analysis
Positive
50.09
Price Trends
42.38
Positive
41.35
Positive
42.84
Positive
Market Momentum
2.04
Negative
70.16
Negative
88.25
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WOR, the sentiment is Positive. The current price of 50.09 is above the 20-day moving average (MA) of 42.79, above the 50-day MA of 42.38, and above the 200-day MA of 42.84, indicating a bullish trend. The MACD of 2.04 indicates Negative momentum. The RSI at 70.16 is Negative, neither overbought nor oversold. The STOCH value of 88.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WOR.
Worthington Industries Risk Analysis
Worthington Industries disclosed 30 risk factors in its most recent earnings report. Worthington Industries 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
Worthington Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $15.16B | 18.23 | 11.71% | 1.54% | -6.56% | -31.89% | |
73 Outperform | $18.58B | 12.59 | 17.27% | 1.48% | -6.68% | -32.96% | |
71 Outperform | $28.14B | 14.41 | 9.79% | 1.78% | -11.46% | -53.33% | |
68 Neutral | $608.86M | 12.85 | 8.22% | 3.02% | 4.95% | -54.69% | |
66 Neutral | $2.53B | 42.34 | 6.56% | 1.31% | -69.82% | -78.10% | |
66 Neutral | $5.22B | 76.70 | 1.78% | 1.56% | -7.93% | -89.29% | |
62 Neutral | $8.05B | 13.60 | 4.04% | 3.11% | 3.70% | -14.19% |
* Industrials Sector Average
Performance Comparison
WOR
Worthington Industries
50.09
-10.16
-16.86%
CMC
Commercial Metals Company
46.01
-11.91
-20.56%
NUE
Nucor
121.95
-75.69
-38.30%
RS
Reliance Steel
288.75
-39.34
-11.99%
STLD
Steel Dynamics
125.08
-21.89
-14.89%
AMRK
A-Mark Precious Metals
25.37
-5.04
-16.57%
Worthington Industries Earnings Call Summary
Earnings Call Date: Mar 25, 2025 | % Change Since: 20.32% | Next Earnings Date: Jun 25, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and challenges. Highlights include growth in adjusted EBITDA and earnings per share, strong innovation with new product launches, and a solid financial position. However, the company faced a decline in net sales, challenges in joint ventures due to steel prices, and restructuring charges. Overall, the sentiment is balanced with a slight positive tilt due to strong operational execution and innovation.Highlights
Adjusted EBITDA and Earnings Per Share Growth
Year-over-year and sequential growth in adjusted EBITDA and earnings per share. Adjusted EBITDA margin in the quarter was 24% compared to 21% a year ago.
Innovation and Product Launches
Launch of SureSense wireless propane-level sensing technology and Balloon Time Mini helium tank, now available at Target stores. These innovations are expected to drive future growth.
Strong Financial Position
Free cash flow totaled $144 million on a trailing 12-month basis, representing a 104% free cash flow conversion rate. The company has a strong balance sheet with low leverage and ample liquidity.
Building Products Growth
Q3 net sales grew 11% year-over-year to $165 million, driven by the Ragasco acquisition and favorable product mix.
Positive Consumer Products Performance
Q3 net sales grew 5% year-over-year to $140 million. The quarter benefited from higher gross profit dollars and improved gross margin percent.
Lowlights
Net Sales Decline
Consolidated net sales for the quarter were $305 million, a 3.9% decrease from $317 million in the prior year quarter.
Challenges in Joint Ventures
ClarkDietrich's results were negatively impacted by a decline in steel prices, leading to an $8 million year-over-year decline in equity earnings.
Restructuring and Other Charges
The current quarter was negatively impacted by net pre-tax restructuring and other charges of $5 million, primarily due to an earnout associated with the Ragasco acquisition.
Consumer Bankruptcy Impact
A $1 million charge was recorded related to a customer that filed for bankruptcy during the quarter.
Company Guidance
During the Worthington Enterprises Third Quarter Fiscal 2025 earnings call, the company reported a strong financial performance, highlighted by a 24% adjusted EBITDA margin, up from 21% in the same quarter the previous year. Net sales decreased by 4% due to the deconsolidation of the Sustainable Energy Solutions segment, but excluding this impact, revenues increased by over 8%, driven by the Ragasco acquisition and improved demand across various value streams. The company reported GAAP earnings from continuing operations of $0.79 per share, with adjusted earnings reaching $0.91 per share, up from $0.80 per share in the prior year. Gross profit rose to $89 million, reflecting a 620 basis point increase in gross margin to 29.3%. Worthington highlighted several new product launches and strategic partnerships, such as the SureSense IoT-enabled propane-level sensing technology and the Balloon Time Mini helium tank, while continuing to invest in facility modernization and automation. The company's strong balance sheet, with $223 million in cash and a $500 million undrawn credit facility, positions it well for future growth, including potential acquisitions.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.