One-glance verdict
Undervalued
$43.95 our estimate vs market $18.70
Wall Street consensus: $22.50 (-48.8% lower than our fair-value estimate)
57% below our estimate, below the bear case
Fundamentals snapshot
Metallus Inc.
MTUS · NYQ · Basic Materials · Steel
Current price
$18.70
52-week range
$14.19 - $21.73
Market cap
$778.44M
Balance sheet
Healthy
1.22x Concerning
Net cash $90.80M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.4% last year.
- Reward Returns 0.4% on equity, ahead of 25% of its peers.
- Risk Stock trades 60.0% above its 5-year average P/E.
- Risk Operating margin compressed from 4.0% to 2.5% over 3 years.
What this company does
Metallus Inc.
Metallus makes and sells highly specialized, strong steel products like bars and tubes that are custom-made for tough jobs. Its customers are in heavy industries like automotive, energy, and construction, who use this steel to create critical parts like gears, axles, and drill pipes. Because its products are essential for making big machinery, the company's success is often tied to the overall health of the industrial economy.
How the company got here
Originally the steel-making division of The Timken Company, a bearing manufacturer, the business started producing its own steel in 1915 to ensure a steady supply during World War I. It eventually made more steel than it needed and began selling to other companies. In 2014, it became a separate, publicly traded company called TimkenSteel. To better reflect its focus on high-performance metals beyond just steel, the company rebranded as Metallus Inc. in February 2024.
What it actually does
Metallus makes very strong, specialized steel products from recycled scrap metal. Think of them not as a provider of steel for everyday items, but as a creator of high-performance metal for demanding jobs. Their products are used inside machines and equipment where strength and reliability are critical, such as gears and axles in cars and trucks, drill parts for the energy industry, and components for aircraft landing gear. They create over 500 different grades of steel, often customized for specific customer needs.
Special Bar Quality (SBQ) Steel and Billets
This is the company's main product line, forming the foundation of what they sell. SBQ steel is a type of steel bar made to very precise recipes for customers who need high-purity, high-performance metal for critical parts like gears, axles, and crankshafts. Billets are large, semi-finished blocks of steel that can be shaped by customers into other things. This segment serves a wide range of industries, including automotive, industrial equipment, and energy.
Seamless Mechanical Tubing
Instead of flat sheets or solid bars, this business line produces hollow steel tubes without any seams or welds, which makes them very strong. These tubes are used in applications where they need to withstand a lot of pressure or stress, such as in drilling equipment for the oil and gas industry or in heavy-duty machinery. This represents a significant portion of the company's business, shipping over 100,000 tons of tubing per year.
Manufactured Components and Value-Added Services
This part of the business takes the company's steel and does further work on it, making it more valuable for the customer. Instead of just selling a steel bar, they might cut, heat-treat, or machine it into a more finished part that's closer to what the customer needs for their own production line. This includes services like managing inventory (the supply of parts) for customers so they get exactly what they need, when they need it. This segment aims to deepen customer relationships by providing more complete solutions.
What management is betting on now
The company is focused on being a supplier for technically difficult applications where quality is more important than the lowest price. A key priority is growing its business in the aerospace and defense industries, where the need for high-performance, reliable materials is very high. They are also investing in new equipment and technology to improve their processes and create even higher-quality products. The name change to Metallus is part of this strategy, signaling a broader focus on being a specialty metals provider, not just a steel mill.
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 Q2
$-5.80M
FY2024 Q3
$-32.90M
FY2024 Q4
$-1.30M
FY2025 Q1
$-66.40M
FY2025 Q2
$17.00M
FY2025 Q3
$-6.40M
FY2025 Q4
$-37.20M
FY2026 Q1
$-51.60M
Revenue
$308.30M
Net income
$5.40M
Diluted EPS
0.13
Operating cash flow
$-26.90M
Free cash flow
$-51.60M
Fetching…
Sources
Revenue
$267.30M
Net income
$-14.30M
Diluted EPS
-0.34
Operating cash flow
$-1.90M
Free cash flow
$-37.20M
Fetching…
Sources
Revenue
$305.90M
Net income
$8.10M
Diluted EPS
0.19
Operating cash flow
$22.00M
Free cash flow
$-6.40M
Fetching…
Sources
Revenue
$304.60M
Net income
$3.70M
Diluted EPS
0.09
Operating cash flow
$34.80M
Free cash flow
$17.00M
Fetching…
Sources
Revenue
$280.50M
Net income
$1.30M
Diluted EPS
0.03
Operating cash flow
$-38.90M
Free cash flow
$-66.40M
Fetching…
Sources
Revenue
$240.50M
Net income
$-21.40M
Diluted EPS
-0.46
Operating cash flow
$13.90M
Free cash flow
$-1.30M
Fetching…
Sources
Revenue
$227.20M
Net income
$-5.90M
Diluted EPS
-0.13
Operating cash flow
$-15.30M
Free cash flow
$-32.90M
Fetching…
Sources
Revenue
$294.70M
Net income
$4.60M
Diluted EPS
0.10
Operating cash flow
$8.30M
Free cash flow
$-5.80M
Fetching…
Sources
Is it cheap or expensive?
Fair value $43.95 vs current price $18.70
Wall Street consensus is the average analyst price target: $22.50 (-48.8% lower than our fair-value estimate).
Our most-likely fair value is $43.95 a share — about 135.0% above today's price of $18.70, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $90.8M - more cash than debt. Interest coverage 1.2x.
Net debt
$-90.80M
Interest coverage
1.22x
Metallus Inc.'s profit covers its interest bill about 1.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
MTUS
BASELINE
Metallus Inc.
Total debt $13.20M Interest coverage 1.22x This is the baseline the peer rows are being compared against.
Total debt $699.30M Interest coverage 8.22x +573% vs MTUS Carries about 6.7x more debt cushion than MTUS.
Total debt $3.62B Interest coverage 11.43x +835% vs MTUS Carries about 9.3x more debt cushion than MTUS.
Total debt $664.82M Interest coverage -9.12x -100% vs MTUS This peer has almost no interest-payment cushion compared with MTUS.
What you should know
The case for and against MTUS
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.4% last year.
-
Returns 0.4% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 6/10 years.
Risks
-
Stock trades 60.0% above its 5-year average P/E.
-
Operating margin compressed from 4.0% to 2.5% over 3 years.
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)
267.14x
Forward P/E
14.01x
P/B
1.14x
P/S
0.66x
EV/EBITDA
10.48x
PEG ratio
1.50x
Profitability
How much profit each dollar creates
Gross margin
8.3%
Operating margin
2.5%
Net margin
0.2%
ROE
0.4%
ROA
0.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.02x
Current ratio
1.73x
Quick ratio
0.79x
Total debt
$13.20M
Total cash
$104.00M
Growth
How the business has been compounding
Revenue TTM
$1.19B
Revenue 5Y CAGR
-2.5%
EPS TTM
0.07
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$28.00M
Free CF TTM
$-93.00M
FCF margin
-7.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2015-08-25