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Steel Dynamics (STLD) Gains But Lags Market: What You Should Know

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Steel Dynamics (STLD - Free Report) closed the most recent trading day at $107.50, moving +0.21% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.3%. Meanwhile, the Dow gained 0.24%, and the Nasdaq, a tech-heavy index, added 0.34%.

Prior to today's trading, shares of the steel producer and metals recycler had lost 10.94% over the past month. This has lagged the Basic Materials sector's loss of 3.26% and the S&P 500's loss of 1.21% in that time.

Investors will be hoping for strength from Steel Dynamics as it approaches its next earnings release. In that report, analysts expect Steel Dynamics to post earnings of $3.67 per share. This would mark a year-over-year decline of 39.04%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.93 billion, down 11.47% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.84 per share and revenue of $19.5 billion. These totals would mark changes of -34.57% and -12.42%, respectively, from last year.

Any recent changes to analyst estimates for Steel Dynamics should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 27.85% higher within the past month. Steel Dynamics is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that Steel Dynamics has a Forward P/E ratio of 7.23 right now. This represents a discount compared to its industry's average Forward P/E of 9.26.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 17, putting it in the top 7% 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.

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