One-glance verdict
Overvalued
$9.48 our estimate vs market $31.80
Wall Street consensus: $60.20 (534.7% higher than our fair-value estimate)
235% above our estimate, beyond the bull case
Fundamentals snapshot
Century Aluminum Company
CENX · NMS · Basic Materials · Aluminum
Current price
$31.80
52-week range
$25.40 - $70.43
Market cap
$3.15B
Balance sheet
Stretched
3.31x Stretched
Net debt $136.60M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 5.5% last year.
- Reward Returns 51.7% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 5/10 years.
What this company does
Century Aluminum Company
Century Aluminum Company makes primary aluminum and alumina, which are basic forms of aluminum used in many products, and the money it makes primarily comes from selling these. This matters because aluminum is a key material for industries like automotive and aerospace, so the company's success is tied to the health of those larger economies.
How the company got here
Century Aluminum was founded in 1995 with a focus on strengthening domestic aluminum production in the U.S.. The company went public on NASDAQ in 1996, marking its entry into the stock market. Over the years, Century Aluminum has grown through strategic acquisitions and capital expansion projects, evolving into a global producer of primary aluminum. The company has navigated the cyclical nature of the aluminum industry, facing challenges such as low aluminum prices and high energy costs, which at times led to curtailments or reduced operations at some of its facilities. A significant shift in strategy began around 2021, with a pivot towards "Green Aluminum" by leveraging renewable energy sources for production, aiming to meet growing environmental, social, and governance (ESG) demands.
What it actually does
Century Aluminum produces primary aluminum, which is aluminum made directly from raw materials rather than recycled scrap. This metal is a fundamental component in numerous industries, including automotive, aerospace, defense, consumer goods, and energy. Aluminum's lightweight and strong properties make it essential for applications ranging from beverage cans and aircraft parts to electric vehicle frames and solar panel mounts. The company sells its products to industrial customers, not directly to consumers.
Primary Aluminum Smelting
This is the core business of Century Aluminum, involving the operation of aluminum reduction facilities, also known as smelters. The company operates smelters in the United States (Kentucky and South Carolina) and in Iceland. These facilities transform raw materials into primary aluminum products, which are then sold to various industrial sectors. The production process is energy-intensive, and the cost of electricity is a significant factor in the company's competitiveness. Century Aluminum also produces value-added aluminum products, such as billets and foundry products, in addition to standard-grade aluminum.
Bauxite Mining and Alumina Refining
Century Aluminum has operations in Jamaica that include bauxite mining and alumina refining. Bauxite is the raw ore from which aluminum is extracted, and alumina is an intermediate product refined from bauxite before being smelted into aluminum. This segment of the business provides a crucial upstream component for the company's primary aluminum production, contributing to a more integrated supply chain. The Jamalco facility in Jamaica is a key part of this operation, with Century Aluminum holding a majority interest.
Carbon Anode Production
The company operates a carbon anode production facility in Vlissingen, the Netherlands. Carbon anodes are essential components used in the aluminum smelting process, acting as electrodes that conduct electricity and facilitate the reduction of alumina into aluminum. This facility supplies anodes to Century Aluminum's smelter in Iceland, further integrating its operations and ensuring a stable supply of critical materials for production.
What management is betting on now
Century Aluminum's current strategy heavily emphasizes strengthening its domestic supply chain and expanding low-carbon aluminum production, often referred to as "Green Aluminum". A major initiative is the development of a new, low-carbon primary aluminum smelter in Inola, Oklahoma, a project that has garnered potential support from the U.S. Department of Energy. Management is focused on improving the competitiveness of existing operations by managing costs and increasing efficiency, while also exploring upstream investment opportunities. The company aims to provide primary aluminum closer to its customers, reducing supply chain lengths and enhancing resilience against global disruptions.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-2.40M
FY2024 Q4
$-54.60M
FY2025 Q1
$51.10M
FY2025 Q2
$-15.90M
FY2025 Q3
$-18.10M
FY2025 Q4
$67.70M
FY2026 Q1
$-6.40M
FY2026 Q2
$108.00M
Revenue
$752.10M
Net income
$249.30M
Diluted EPS
2.39
Operating cash flow
$167.60M
Free cash flow
$108.00M
Fetching…
Sources
Revenue
$649.20M
Net income
$337.50M
Diluted EPS
3.23
Operating cash flow
$68.40M
Free cash flow
$-6.40M
Fetching…
Sources
Revenue
$633.70M
Net income
$1.80M
Diluted EPS
0.03
Operating cash flow
$102.80M
Free cash flow
$67.70M
Fetching…
Sources
Revenue
$632.20M
Net income
$14.90M
Diluted EPS
0.15
Operating cash flow
$2.00M
Free cash flow
$-18.10M
Fetching…
Sources
Revenue
$628.10M
Net income
$-4.60M
Diluted EPS
-0.05
Operating cash flow
$7.90M
Free cash flow
$-15.90M
Fetching…
Sources
Revenue
$633.90M
Net income
$29.70M
Diluted EPS
0.29
Operating cash flow
$72.30M
Free cash flow
$51.10M
Fetching…
Sources
Revenue
$630.90M
Net income
$45.20M
Diluted EPS
0.58
Operating cash flow
$-41.40M
Free cash flow
$-54.60M
Fetching…
Sources
Revenue
$539.10M
Net income
$47.30M
Diluted EPS
0.46
Operating cash flow
$20.10M
Free cash flow
$-2.40M
Fetching…
Sources
Is it cheap or expensive?
Fair value $9.48 vs current price $31.80
Wall Street consensus is the average analyst price target: $60.20 (534.7% higher than our fair-value estimate).
Our most-likely fair value is $9.48 a share — about 70.2% below today's price of $31.80, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $136.6M. Interest coverage 3.3x.
Net debt
$136.60M
Interest coverage
3.31x
Century Aluminum Company's profit covers its interest bill about 3.3 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
CENX
BASELINE
Century Aluminum Company
Total debt $480.00M Interest coverage 3.31x This is the baseline the peer rows are being compared against.
Total debt $4.82B Interest coverage 4.80x +45% vs CENX Carries about 1.4x more debt cushion than CENX.
Total debt $1.92B Interest coverage 4.47x +35% vs CENX Carries about 1.3x more debt cushion than CENX.
Total debt $1.07B Interest coverage 3.81x +15% vs CENX Has roughly the same debt cushion as CENX.
Total debt $511.60M Interest coverage 3.69x +11% vs CENX Has roughly the same debt cushion as CENX.
Total debt $347.55M Interest coverage 13.33x +302% vs CENX Carries about 4.0x more debt cushion than CENX.
What you should know
The case for and against CENX
3 Rewards
0 Risks
Rewards
-
Revenue grew 5.5% last year.
-
Returns 51.7% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
5.49x
Forward P/E
2.79x
P/B
2.24x
P/S
1.18x
EV/EBITDA
7.13x
PEG ratio
0.06x
Profitability
How much profit each dollar creates
Gross margin
18.9%
Operating margin
28.1%
Net margin
22.6%
ROE
51.7%
ROA
10.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.31x
Current ratio
2.75x
Quick ratio
1.44x
Total debt
$480.00M
Total cash
$343.40M
Growth
How the business has been compounding
Revenue TTM
$2.67B
Revenue 5Y CAGR
3.4%
EPS TTM
5.79
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$340.80M
Free CF TTM
$84.80M
FCF margin
3.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2002-09-18