One-glance verdict
Overvalued
$14.85 our estimate vs market $38.57
Wall Street consensus: $46.00 (209.8% higher than our fair-value estimate)
160% above our estimate, beyond the bull case
Fundamentals snapshot
Worthington Steel, Inc.
WS · NYQ · Basic Materials · Steel
Current price
$38.57
52-week range
$27.22 - $49.17
Market cap
$1.93B
Balance sheet
Healthy
22.11x Strong cushion
Net debt $262.60M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 8.2% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 932.3% above its 5-year average P/E.
- Risk Net debt grew 41.9% over 3 years.
What this company does
Worthington Steel, Inc.
Worthington Steel is a processing company that takes large sheets of steel and shapes them into custom parts for other businesses. It makes most of its money selling these specialized parts to industries like car manufacturing, construction, and agriculture in North America. This means the company's success is closely tied to the health of the broader economy, as it does well when its customers are busy building cars, trucks, and buildings.
How the company got here
Worthington Steel's story began in 1955 when John H. McConnell started a small steel processing business in Ohio with a loan against his car. For decades, this business was part of a larger company called Worthington Industries, which expanded into other areas. A key moment was the 2021 acquisition of Tempel Steel, which added expertise in electrical steel products used in motors and transformers. In December 2023, the original steel business was spun off to become a separate, publicly traded company, returning to its roots as Worthington Steel, Inc.
What it actually does
Worthington Steel doesn't make new steel from scratch like a traditional steel mill. Instead, it buys large rolls of flat steel and acts as a middleman, custom-processing it for other companies. Think of them as a tailor for steel; they cut, shape, and treat the metal to the exact specifications their customers need for products in the automotive, construction, and agriculture industries, among others. They also provide services like warehousing and managing materials for their clients.
Carbon Flat-Rolled Steel Processing
This is the company's core business, where they take large coils of carbon steel and process them for various industries. This involves services like slitting (cutting the steel into narrower strips), pickling (cleaning the surface), and galvanizing (coating it with zinc to prevent rust). Customers in markets like construction, heavy trucking, and agriculture pay for this customized steel to use in their own manufacturing. This segment represents the foundational and largest part of the company's operations.
Tailor Welded Solutions
Through a joint venture (a business arrangement where two or more companies create a new entity) called TWB Company, Worthington Steel creates tailor welded blanks. These are pieces of steel of different thicknesses and strengths that are laser-welded together before being stamped into a final part, primarily for the automotive industry. This process helps car manufacturers make vehicles that are both lighter and safer, and it's a significant business line for the company in North America.
Electrical Steel Laminations
This part of the business, which grew significantly with the acquisition of Tempel Steel, produces electrical steel laminations. These are specialized steel components that are crucial for the cores of electric motors, generators, and transformers, making them essential for everything from electric vehicles to the power grid. This is a key growth area for the company, as it directly serves the expanding market for electrification and sustainable energy.
What management is betting on now
The company's leadership is focused on growing its more specialized, higher-value product lines where precision matters more than just selling bulk steel. A major part of this strategy is expanding their role in electrification by producing more electrical steel laminations for motors and transformers, capitalizing on the growth in electric vehicles and sustainable energy. They are also concentrating on being a standalone company after separating from their former parent, which allows them to focus entirely on the steel processing market and create more value for their shareholders (the owners of the company's stock).
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 Q4
$-9.20M
FY2025 Q1
$33.10M
FY2025 Q2
$33.20M
FY2025 Q3
$25.20M
FY2025 Q4
$8.40M
FY2026 Q1
$-35.70M
FY2026 Q2
$74.60M
FY2026 Q3
$33.30M
Revenue
$769.80M
Net income
$10.40M
Diluted EPS
0.20
Operating cash flow
$63.30M
Free cash flow
$33.30M
Fetching…
Sources
Revenue
$871.90M
Net income
$18.80M
Diluted EPS
0.37
Operating cash flow
$99.30M
Free cash flow
$74.60M
Fetching…
Sources
Revenue
$872.90M
Net income
$36.80M
Diluted EPS
0.72
Operating cash flow
$-6.30M
Free cash flow
$-35.70M
Fetching…
Sources
Revenue
$832.90M
Net income
$55.70M
Diluted EPS
1.11
Operating cash flow
$53.90M
Free cash flow
$8.40M
Fetching…
Sources
Revenue
$687.40M
Net income
$13.80M
Diluted EPS
0.27
Operating cash flow
$53.80M
Free cash flow
$25.20M
Fetching…
Sources
Revenue
$739.00M
Net income
$12.80M
Diluted EPS
0.25
Operating cash flow
$68.00M
Free cash flow
$33.20M
Fetching…
Sources
Revenue
$834.00M
Net income
$28.40M
Diluted EPS
0.56
Operating cash flow
$54.60M
Free cash flow
$33.10M
Fetching…
Sources
Revenue
$911.00M
Net income
$53.20M
Diluted EPS
1.06
Operating cash flow
$35.60M
Free cash flow
$-9.20M
Fetching…
Sources
Is it cheap or expensive?
Fair value $14.85 vs current price $38.57
Wall Street consensus is the average analyst price target: $46.00 (209.8% higher than our fair-value estimate).
Our most-likely fair value is $14.85 a share — about 61.5% below today's price of $38.57, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $262.6M. Interest coverage 22.1x.
Net debt
$262.60M
Interest coverage
22.11x
Worthington Steel, Inc.'s profit covers its interest bill about 22.1 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
WS
BASELINE
Worthington Steel, Inc.
Total debt $352.60M Interest coverage 22.11x This is the baseline the peer rows are being compared against.
Total debt $100.91M Interest coverage 6.25x -72% vs WS Carries about 3.5x less debt cushion than WS.
Total debt $2.03B Interest coverage 6.08x -72% vs WS Carries about 3.6x less debt cushion than WS.
Total debt $3.60B Interest coverage 11.43x -48% vs WS Carries about 1.9x less debt cushion than WS.
What you should know
The case for and against WS
3 Rewards
3 Risks
Rewards
-
Revenue grew 8.2% last year.
-
Free cash flow was positive in 4/10 years.
-
Dividend yield is 1.6% with 3-year payout history.
Risks
-
Stock trades 932.3% above its 5-year average P/E.
-
Net debt grew 41.9% over 3 years.
-
Operating margin compressed from 5.3% to 1.8% 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)
113.44x
Forward P/E
15.43x
P/B
1.71x
P/S
0.58x
EV/EBITDA
10.46x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
12.3%
Operating margin
1.8%
Net margin
3.6%
ROE
10.4%
ROA
4.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.26x
Current ratio
1.48x
Quick ratio
0.72x
Total debt
$352.60M
Total cash
$90.00M
Growth
How the business has been compounding
Revenue TTM
$3.35B
Revenue 5Y CAGR
-8.7%
EPS TTM
0.34
EPS 5Y CAGR
-15.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$210.20M
Free CF TTM
$99.90M
FCF margin
3.0%
Dividend
Shareholder payout
Yield
1.6%
Payout ratio
26.7%
Last ex-div date
2026-06-12