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Steel Dynamics (STLD) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Steel Dynamics (STLD - Free Report) closed at $60.93, marking a +1.25% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.19%.

Heading into today, shares of the steel producer and metals recycler had gained 9.38% over the past month, outpacing the Basic Materials sector's gain of 3.07% and the S&P 500's gain of 0.37% in that time.

Investors will be hoping for strength from STLD as it approaches its next earnings release. In that report, analysts expect STLD to post earnings of $2.73 per share. This would mark year-over-year growth of 480.85%. Our most recent consensus estimate is calling for quarterly revenue of $4.1 billion, up 95.87% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.41 per share and revenue of $14.51 billion, which would represent changes of +196.13% and +51.11%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for STLD. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.12% higher. STLD is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, STLD is holding a Forward P/E ratio of 7.15. Its industry sports an average Forward P/E of 7.22, so we one might conclude that STLD is trading at a discount comparatively.

Meanwhile, STLD's PEG ratio is currently 0.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Steel - Producers was holding an average PEG ratio of 0.52 at yesterday's closing price.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 24, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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