One-glance verdict
Undervalued
$44.00 our estimate vs market $20.56
Wall Street consensus: $24.08 (-45.3% lower than our fair-value estimate)
53% below our estimate, below the bear case
Fundamentals snapshot
Metallus Inc.
MTUS · NYQ · Basic Materials · Steel
Current price
$20.56
52-week range
$14.19 - $22.58
Market cap
$852.20M
Balance sheet
Healthy
1.22x Concerning
Net cash $93.90M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 5.5% last year.
- Reward Returns 1.2% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 6/10 years.
- Risk Operating margin compressed from 4.0% to 3.5% over 3 years.
What this company does
Metallus Inc.
Metallus Inc. makes and sells special steel parts like bars and tubes that are used in things like car parts, oil equipment, and airplane components. Most of their money comes from selling these steel products to various industries like automotive and energy. This is important because their success depends on how well these industries are doing and their ability to produce high-quality steel parts.
How the company got here
Metallus Inc., formerly known as TimkenSteel Corporation, has a history rooted in steel production dating back over a century. Its origins trace back to 1915 when The Timken Company began making its own steel to ensure a steady supply for its bearing manufacturing, especially during World War I. [3] Over time, this steel operation grew beyond internal needs, leading to the sale of alloy steel to external customers. [3] The company was spun off from The Timken Company in 2014, becoming an independent specialty steel producer focused on engineered applications. [2] In February 2024, it rebranded to Metallus Inc. to signal a broader identity in advanced metals beyond its traditional steelmaking roots. [2, 5] This name change reflects a strategic focus on high-performance metals for demanding applications. [2]
What it actually does
Metallus Inc. is a manufacturer of high-performance specialty steel products. [8] They produce a variety of steel types, including alloy steel, carbon steel, and micro-alloy steel, using electric arc furnace technology. [1] These steels are engineered for demanding applications where strength, durability, and consistent performance are critical. [4, 8] Metallus serves a wide range of industries, including automotive, industrial equipment, mining, construction, rail, aerospace and defense, heavy truck, agriculture, and power generation. [7, 16] The company emphasizes its metallurgical expertise and ability to tailor products to specific customer needs. [2, 8]
Special Bar Quality (SBQ) Bars
This segment is Metallus's largest, accounting for about 60.7% of its revenue. [1] Special Bar Quality (SBQ) bars are custom alloy, carbon, and micro-alloy steel bars made to very precise specifications for purity and composition. [1] These bars are essential components in a wide array of products, including gears, axles, crankshafts, and motor shafts, used in industries like automotive and heavy equipment manufacturing. [1] The focus here is on delivering steel with specific properties that ensure the reliability and performance of the final product.
Seamless Mechanical Tubing (SMT)
Seamless Mechanical Tubing (SMT) represents about 10.9% of Metallus's revenue. [1] This involves producing seamless tubes that are used in mechanical applications and power transmission systems. [1] These tubes are critical for components that require high strength and precision, such as in industrial machinery and automotive parts where they might be used for axles or structural elements. [1, 4] The "seamless" aspect means the tubing is formed without a welded seam, which enhances its structural integrity and performance under stress.
Manufactured Components
The Manufactured Components segment makes up approximately 27.0% of Metallus's revenue. [1] In this area, Metallus goes beyond just producing steel by offering highly engineered steel components. [9] This includes services like precision cutting, machining, and creating ready-to-assemble parts for original equipment manufacturers (OEMs). [1, 9] These components are designed to meet specific customer production needs, often supplied through just-in-time inventory programs to help customers manage their own resources efficiently. [9]
What management is betting on now
Metallus's management is focused on differentiating itself by producing technically demanding specialty steel products rather than competing solely on price for commodity steel. [2] A key strategy is to improve the mix of products toward higher-value applications, leveraging their expertise in metallurgy and engineering. [2] They are also investing in operational efficiency, safety, and reliability across their production facilities. [1, 2] The company is capitalizing on growth opportunities, particularly in the aerospace and defense sectors, and aims to expand its value-added processing and customer solutions, such as machining and supply chain support. [2, 8, 12] This approach aims to build stronger customer relationships and achieve more consistent profitability, even through economic cycles. [2]
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
$-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
FY2026 Q2
$-2.40M
Revenue
$341.00M
Net income
$8.90M
Diluted EPS
0.21
Operating cash flow
$12.80M
Free cash flow
$-2.40M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $44.00 vs current price $20.56
Wall Street consensus is the average analyst price target: $24.08 (-45.3% lower than our fair-value estimate).
Our most-likely fair value is $44.00 a share — about 114.0% above today's price of $20.56, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $93.9M - more cash than debt. Interest coverage 1.2x.
Net debt
$-93.90M
Interest coverage
1.22x
Metallus Inc.'s profit covers its interest bill about 1.2 times over. which is weaker than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
MTUS
BASELINE
Metallus Inc.
Total debt $14.70M Interest coverage 1.22x This is the baseline the peer rows are being compared against.
Total debt $727.50M Interest coverage 16.03x +1,211% vs MTUS Carries about 13.1x more debt cushion than MTUS.
Total debt $2.19B Interest coverage 5.80x +374% vs MTUS Carries about 4.7x more debt cushion than MTUS.
Total debt $2.59B Interest coverage 3.73x +205% vs MTUS Carries about 3.1x more debt cushion than MTUS.
What you should know
The case for and against MTUS
3 Rewards
1 Risk
Rewards
-
Revenue grew 5.5% last year.
-
Returns 1.2% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 6/10 years.
Risks
-
Operating margin compressed from 4.0% to 3.5% 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)
108.21x
Forward P/E
14.76x
P/B
1.23x
P/S
0.70x
EV/EBITDA
11.51x
PEG ratio
1.00x
Profitability
How much profit each dollar creates
Gross margin
8.2%
Operating margin
3.5%
Net margin
0.7%
ROE
1.2%
ROA
0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.02x
Current ratio
1.75x
Quick ratio
0.83x
Total debt
$14.70M
Total cash
$108.60M
Growth
How the business has been compounding
Revenue TTM
$1.22B
Revenue 5Y CAGR
-2.5%
EPS TTM
0.19
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$6.00M
Free CF TTM
$-93.00M
FCF margin
-7.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2015-08-25