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Olympic Steel (ZEUS)
NASDAQ:ZEUS
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Olympic Steel
(NASDAQ:ZEUS)
52Neutral
Olympic Steel (ZEUS) vs. S&P 500 (SPY)
Market Cap
$354.57M
Dividend Yield1.88%
Average Volume (3M)117.62K
Price to Earnings (P/E)16.2
Beta (1Y)1.23
Revenue Growth-10.03%
EPS Growth-48.82%
CountryUS
Employees2,163
SectorBasic Materials
Sector Strength61
IndustrySteel
Share Statistics
EPS (TTM)1.97
Shares Outstanding11,135,890
10 Day Avg. Volume105,846
30 Day Avg. Volume117,622
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.18
Price to Cash Flow (P/CF)6.10
P/FCF Ratio8.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.00Price Target Upside31.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Olympic Steel Business Overview & Revenue Model
Company DescriptionOlympic Steel, Inc. processes, distributes, and storage metal products in the United States and internationally. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The Carbon Flat Products segment sells and distributes processed carbon and coated flat-rolled sheets, coil and plate products, and fabricated parts. The Specialty Metals Flat Products segment sells and distributes processed aluminum and stainless flat-rolled sheets and coil products, flat bar products, and fabricated parts, as well as stainless steel and aluminum plates, sheets, angles, rounds, flat bars, tubing and pipe, and prime tin mill products. The Tubular and Pipe Products segment distributes metal tubing products, pipes, bars, valves and fittings, and fabricated pressure parts. The company also provides various processing services comprising cutting-to-length, slitting, shearing, roll forming, shape correction, surface improvement, blanking, tempering, plate burning, and stamping as well as offers value-added processing of saw cutting, laser cutting, beveling, threading, and grooving services. In addition, the company provides shot blasting, grinding, edging, and polishing; bending, drilling, milling, tapping, boring, and sawing metal; machining, welding, assembly, and painting of component parts. Further, the company process metals to specified lengths, widths, shapes, and surface. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, commercial appliances, and electrical equipment as well as military vehicles and equipment, general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Bedford Heights, Ohio.
How the Company Makes MoneyOlympic Steel generates revenue primarily through the sale of processed and distributed metal products. The company purchases large volumes of flat-rolled carbon, stainless steel, and aluminum from major mills and suppliers, which it then processes to customer specifications using advanced machinery and technology. These products are subsequently sold to a wide range of industries, including automotive, construction, and manufacturing, either directly or through distribution networks. Olympic Steel's business model relies on maintaining strong relationships with both its suppliers and customers, optimizing inventory management, and leveraging its processing capabilities to add value to raw materials. Additionally, strategic partnerships and long-term contracts with key clients and suppliers play a crucial role in driving sales and sustaining profitability.
Olympic Steel Financial Statement Overview
Summary
Olympic Steel faces challenges in terms of revenue and profit growth, with declining performance across most income statement metrics. The balance sheet remains strong, supported by a high equity ratio and no debt, which provides financial stability. Cash flow management needs attention, as free cash flow has decreased significantly. Overall, while the company maintains a solid balance sheet, improving profitability and cash generation are critical for future growth.Income Statement
Olympic Steel's revenue has declined over the past two years, with a notable drop from 2022 to 2023, indicating challenges in maintaining growth. Margins have also been under pressure, with the net profit margin dropping from 4.2% in 2023 to 1.2% in 2024. The gross profit margin has remained relatively stable, but the decline in EBIT and EBITDA margins reflects potential inefficiencies or increased costs.45
Neutral
Balance Sheet
The balance sheet shows a strong equity position, with an equity ratio of over 80% in 2024, indicating a solid financial foundation. The company has significantly reduced its debt, resulting in a debt-free position in 2024, which enhances financial stability. However, the return on equity has decreased significantly due to declining net income, which could impact future growth.60
Neutral
Cash Flow
Operating cash flow remains positive, but a substantial decline in free cash flow from 2023 to 2024 raises concerns about cash generation efficiency. The free cash flow to net income ratio has decreased, indicating less cash being generated relative to profits. Despite a challenging year, cash management remains adequate with no significant liquidity issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.94B | 2.16B | 2.56B | 2.31B | 1.23B | Gross Profit |
| 1.92B | 475.60M | 486.06M | 510.20M | 255.04M | EBIT |
| 47.86M | 77.67M | 133.75M | 172.47M | 573.00K | EBITDA |
| 47.86M | 104.77M | 153.24M | 191.50M | 18.99M | Net Income Common Stockholders |
| 22.98M | 44.53M | 90.93M | 121.05M | -5.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 11.91M | 13.22M | 12.19M | 9.81M | 5.53M | Total Assets |
| 1.04B | 984.84M | 891.63M | 1.02B | 640.61M | Total Debt |
| 310.27M | 228.47M | 194.41M | 355.84M | 186.15M | Net Debt |
| 298.35M | 215.24M | 182.22M | 346.03M | 180.62M | Total Liabilities |
| 470.57M | 429.36M | 375.66M | 599.13M | 339.60M | Stockholders Equity |
| 15.31M | 555.48M | 515.97M | 424.44M | 301.01M |
| Cash Flow | Free Cash Flow | |||
| 4.19M | 153.83M | 166.00M | -157.38M | 51.85M | Operating Cash Flow |
| 33.68M | 175.16M | 185.85M | -146.37M | 61.65M | Investing Cash Flow |
| -109.43M | -190.84M | -16.56M | -13.46M | -28.15M | Financing Cash Flow |
| 74.44M | 16.72M | -166.91M | 164.12M | -33.71M |
Olympic Steel Technical Analysis
Neutral
32.65
Price Trends
33.81
Negative
35.86
Negative
38.79
Negative
Market Momentum
-0.49
Negative
47.78
Neutral
59.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZEUS, the sentiment is Neutral. The current price of 32.65 is above the 20-day moving average (MA) of 32.55, below the 50-day MA of 33.81, and below the 200-day MA of 38.79, indicating a neutral trend. The MACD of -0.49 indicates Negative momentum. The RSI at 47.78 is Neutral, neither overbought nor oversold. The STOCH value of 59.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZEUS.
Olympic Steel Risk Analysis
Olympic Steel disclosed 28 risk factors in its most recent earnings report. Olympic Steel 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
Olympic Steel Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $14.70B | 17.68 | 11.71% | 1.58% | -6.56% | -31.89% | |
74 Outperform | $18.42B | 12.46 | 17.27% | 1.50% | -6.68% | -32.96% | |
66 Neutral | $5.29B | 77.38 | 1.78% | 1.54% | -7.93% | -89.29% | |
52 Neutral | $354.57M | 16.18 | 4.07% | 1.88% | -10.03% | -48.82% | |
49 Neutral | $9.21B | 26.17 | 3.43% | 0.49% | -13.48% | -56.94% | |
47 Neutral | $2.66B | -3.61 | -22.67% | 3.28% | 3.74% | -27.14% |
* Basic Materials Sector Average
Performance Comparison
ZEUS
Olympic Steel
32.65
-34.54
-51.41%
CMC
Commercial Metals Company
48.75
-7.80
-13.79%
RS
Reliance Steel
287.39
-38.97
-11.94%
STLD
Steel Dynamics
126.66
-16.07
-11.26%
X
United States Steel
41.15
0.67
1.66%
Olympic Steel Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -10.52% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call for Olympic Steel highlighted the company's ability to deliver profitable results and make strategic investments despite challenging market conditions. The successful acquisition of Metalworks and increased dividend show positive long-term strategic direction. However, year-over-year declines in net income and EBITDA, alongside increased debt, highlight the challenges faced. Overall, the sentiment is balanced.Highlights
Profitable Results in Challenging Environment
Olympic Steel managed to deliver profitable results in 2024 despite a challenging metals industry environment, with net income of $23 million and adjusted EBITDA of $72.5 million.
Successful Acquisition of Metalworks
The acquisition of Metalworks in November 2024 for $80 million is expected to be immediately accretive, expanding Olympic Steel's product portfolio and strategic fit with their service center business.
Increase in Dividend
The board increased the quarterly dividend by 7%, from $0.15 to $0.16 per share, marking the fourth increase since 2022.
Growth in Galvanized Products
Olympic Steel's galvanized participation grew by 17% in 2024, following a 24% increase in 2023.
Strategic Investments in Automation and Capacity Expansion
Olympic Steel announced significant projects for 2025 and early 2026, including new cut-to-length lines and automation projects to enhance throughput, safety, and productivity.
Lowlights
Decline in Year-over-Year Net Income
Net income for Q4 2024 was $3.9 million, down from $7.4 million in Q4 2023, indicating a challenging year-over-year comparison.
Decrease in Adjusted EBITDA
Adjusted EBITDA for Q4 2024 was $14.5 million, a decrease from $16.7 million in the same period last year.
Impact of Low Nickel Prices
The Specialty Metals segment was challenged by nickel surcharges hitting a four-year low, which impacted profitability.
Increased Debt Level
Total debt increased by $82 million from Q3 2024 to $272 million due to the Metalworks acquisition, although the company maintains significant loan facility availability.
Company Guidance
During the Olympic Steel 2024 fourth quarter earnings call, the company provided several key metrics and insights into its financial performance and strategic initiatives. Olympic Steel reported total sales of $1.9 billion for 2024, with a net income of $23.0 million and an adjusted EBITDA of $72.5 million. The fourth quarter alone saw adjusted EBITDA of $14.5 million, reflecting a sequential improvement over the third quarter's $13 million. The company highlighted its successful acquisition of Metalworks for $80 million, which is expected to enhance its carbon segment. Operating expenses for the fourth quarter were $96.5 million, compared to $100.4 million in the previous year. Capital expenditures for 2024 were $29.5 million, with a planned increase to $35 million in 2025, aimed at automation and capacity expansion. Additionally, the board approved a 7% increase in the quarterly dividend, raising it to $0.16 per share. As Olympic Steel navigates challenges in the metals industry, it remains focused on profitable growth and strategic investments.Olympic Steel Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Olympic Steel Implements New Executive Severance Plan
Neutral
Dec 23, 2024
Olympic Steel has approved a Key Employee Severance Benefit Plan, effective November 2, 2023, which will cover key executives, including the CFO and the President/COO, starting December 18, 2024. The severance benefits under this new plan are similar to those in the previously existing individual agreements, indicating a streamlined approach to executive compensation and retention strategies.
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.