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CMC Jumps 69% in a Year: What's the Right Strategy for Investors Now?
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Key Takeaways
CMC stock has surged 68.8% in a year, outpacing the steel industry and key peers.
CMC posted 11% sales growth and a 142% EPS jump in 1Q26 on strong North America demand.
CMC sees synergies and EBITDA gains ahead, but Europe weakness and Q2 decline risk remain.
Commercial Metals Company (CMC - Free Report) stock has surged 68.8% in a year, outperforming the Zacks Steel - Producers industry’s 61.7% jump. Meanwhile, the Basic Materials sector has risen 47.6%, and the S&P 500 has rallied 18.9% in the same timeframe.
Image Source: Zacks Investment Research
The Steel-producer has also performed better than its peers like Nucor Corporation (NUE - Free Report) and Cleveland-Cliffs Inc. (CLF - Free Report) , which have rallied 41.3% and 8.6%, respectively.
Image Source: Zacks Investment Research
With the CMC stock riding high, investors may rush to add it to their portfolio. However, before making a decision, it will be prudent to take a look at the reasons behind the surge, the company’s growth prospects and risks (if any) in investing.
CMC Reports Solid Earnings Despite Challenges in Europe
In the first quarter of fiscal 2026, CMC reported revenues of $2.12 billion, reflecting 11% year-over-year growth, attributed to solid demand for the North America Steel Group and Construction Solutions Group segments.
In the North America Steel Group segment, the steel products metal margin increased by $132 per ton from the first quarter of fiscal 2025, achieving a year-over-year increase for the second consecutive quarter. The segment’s steel products margin climbed to the highest level in three years.
Solid demand and enhanced cost efficiency in the company’s Tensar division pushed the Construction Solutions Group segment’s adjusted EBITDA margin to a record 20%. The segment reported an adjusted EBITDA margin of 13.4% in the prior-year quarter.
Backed by the tailwinds, the company reported earnings per share of $1.84 in the quarter, a year-over-year surge of 142%.
However, the results were partially offset by soft market conditions for the Europe Steel Group. Even though demand in Europe continued to improve on strong Polish economic growth, import flows negatively impacted average price and margin levels. This, along with annual maintenance outages, pushed the Europe Steel Group’s adjusted EBITDA margin from 12.3% in the first quarter of fiscal 2025 to 4.4% in the first quarter of fiscal 2026.
CMC closed two major acquisitions in December 2025 — Concrete Pipe and Precast, LLC ("CP&P") and Foley Products Company. The addition of these businesses will aid the company’s results in the second quarter of fiscal 2026, offsetting the impacts of seasonal slowdown within key markets.
However, the company will also bear several acquisition-related expenses in the fiscal second quarter, like transaction fees and debt issuance costs. CMC expects overall consolidated core EBITDA in the second quarter of fiscal 2026 to decline sequentially.
CMC reported cash and cash equivalents, and restricted cash of $3 billion at the end of first-quarter fiscal 2026, with available liquidity of $1.9 billion. The company declared a quarterly dividend of 18 cents per share on Jan. 5, 2026, payable to stockholders of record as of Jan. 19, 2026.
In comparison, Nucor maintains an annual dividend of $2.24, and Cleveland-Cliffs does not pay out any regular dividends as of now.
Commercial Metals Sees Positive Estimate Revision Activity
The Zacks Consensus Estimate for Commercial Metals’ fiscal 2026 sales is $8.89 billion, indicating a 13.9% year-over-year jump. The consensus mark for the year’s earnings is pegged at $7.34 per share, indicating a year-over-year upsurge of 134.5%.
The Zacks Consensus Estimate for fiscal 2027 sales implies 5.8% year-over-year growth. The same for earnings suggests a dip of 1.6%.
EPS estimates for fiscal 2026 have moved 19.7% north over the past 60 days, while the same for fiscal 2027 has moved up 14.2% over the past 60 days.
Image Source: Zacks Investment Research
CMC Positioned Well for Long-Term Growth
The recent acquisitions position Commercial Metals as a leading player in the Mid-Atlantic and Southeastern regions, which will operate one of the largest precast concrete platforms in the United States.
CMC has identified operational annual run-rate synergies of $25-$30 million from Foley and CP&P by year three, with additional synergies expected to be recognized in the upcoming years.
Commercial Metals also launched the Transform, Advance, Grow Program in September 2024, which focuses on driving higher through-the-cycle margins, earnings, cash flows and ROIC. The company expects an annualized EBITDA benefit of $150 million in fiscal 2026 from the program.
Moreover, the company has a strong liquidity, financial position and focus on reducing debt through a capital allocation approach, which will likely stoke growth.
Commercial Metals’ Valuation Is Attractive
CMC is currently trading at a forward price/sales ratio of 1.01 compared with the industry's 1.81.
Image Source: Zacks Investment Research
Peer Cleveland-Cliffs is a cheaper option, trading at a forward price/sales ratio of 0.29, while Nucor is trading at a higher price/sales ratio of 1.25.
Final Take on CMC Stock
Commercial Metals has delivered a strong stock performance and reported improved fiscal first-quarter results, backed by solid demand. It remains well-positioned to gain from the recent buyouts. While the stock currently has an appealing valuation, its challenging conditions in Europe suggest caution for new investors.
Existing shareholders should stay invested in CMC’s stock to benefit from its solid long-term growth prospects. The company currently has a Zacks Rank #3 (Hold), which supports our thesis.
View the Zacks #1 Rank List
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CMC Jumps 69% in a Year: What's the Right Strategy for Investors Now?
Key Takeaways
Commercial Metals Company (CMC - Free Report) stock has surged 68.8% in a year, outperforming the Zacks Steel - Producers industry’s 61.7% jump. Meanwhile, the Basic Materials sector has risen 47.6%, and the S&P 500 has rallied 18.9% in the same timeframe.
The Steel-producer has also performed better than its peers like Nucor Corporation (NUE - Free Report) and Cleveland-Cliffs Inc. (CLF - Free Report) , which have rallied 41.3% and 8.6%, respectively.
With the CMC stock riding high, investors may rush to add it to their portfolio. However, before making a decision, it will be prudent to take a look at the reasons behind the surge, the company’s growth prospects and risks (if any) in investing.
CMC Reports Solid Earnings Despite Challenges in Europe
In the first quarter of fiscal 2026, CMC reported revenues of $2.12 billion, reflecting 11% year-over-year growth, attributed to solid demand for the North America Steel Group and Construction Solutions Group segments.
In the North America Steel Group segment, the steel products metal margin increased by $132 per ton from the first quarter of fiscal 2025, achieving a year-over-year increase for the second consecutive quarter. The segment’s steel products margin climbed to the highest level in three years.
Solid demand and enhanced cost efficiency in the company’s Tensar division pushed the Construction Solutions Group segment’s adjusted EBITDA margin to a record 20%. The segment reported an adjusted EBITDA margin of 13.4% in the prior-year quarter.
Backed by the tailwinds, the company reported earnings per share of $1.84 in the quarter, a year-over-year surge of 142%.
However, the results were partially offset by soft market conditions for the Europe Steel Group. Even though demand in Europe continued to improve on strong Polish economic growth, import flows negatively impacted average price and margin levels. This, along with annual maintenance outages, pushed the Europe Steel Group’s adjusted EBITDA margin from 12.3% in the first quarter of fiscal 2025 to 4.4% in the first quarter of fiscal 2026.
CMC closed two major acquisitions in December 2025 — Concrete Pipe and Precast, LLC ("CP&P") and Foley Products Company. The addition of these businesses will aid the company’s results in the second quarter of fiscal 2026, offsetting the impacts of seasonal slowdown within key markets.
However, the company will also bear several acquisition-related expenses in the fiscal second quarter, like transaction fees and debt issuance costs. CMC expects overall consolidated core EBITDA in the second quarter of fiscal 2026 to decline sequentially.
CMC reported cash and cash equivalents, and restricted cash of $3 billion at the end of first-quarter fiscal 2026, with available liquidity of $1.9 billion. The company declared a quarterly dividend of 18 cents per share on Jan. 5, 2026, payable to stockholders of record as of Jan. 19, 2026.
In comparison, Nucor maintains an annual dividend of $2.24, and Cleveland-Cliffs does not pay out any regular dividends as of now.
Commercial Metals Sees Positive Estimate Revision Activity
The Zacks Consensus Estimate for Commercial Metals’ fiscal 2026 sales is $8.89 billion, indicating a 13.9% year-over-year jump. The consensus mark for the year’s earnings is pegged at $7.34 per share, indicating a year-over-year upsurge of 134.5%.
The Zacks Consensus Estimate for fiscal 2027 sales implies 5.8% year-over-year growth. The same for earnings suggests a dip of 1.6%.
EPS estimates for fiscal 2026 have moved 19.7% north over the past 60 days, while the same for fiscal 2027 has moved up 14.2% over the past 60 days.
CMC Positioned Well for Long-Term Growth
The recent acquisitions position Commercial Metals as a leading player in the Mid-Atlantic and Southeastern regions, which will operate one of the largest precast concrete platforms in the United States.
CMC has identified operational annual run-rate synergies of $25-$30 million from Foley and CP&P by year three, with additional synergies expected to be recognized in the upcoming years.
Commercial Metals also launched the Transform, Advance, Grow Program in September 2024, which focuses on driving higher through-the-cycle margins, earnings, cash flows and ROIC. The company expects an annualized EBITDA benefit of $150 million in fiscal 2026 from the program.
Moreover, the company has a strong liquidity, financial position and focus on reducing debt through a capital allocation approach, which will likely stoke growth.
Commercial Metals’ Valuation Is Attractive
CMC is currently trading at a forward price/sales ratio of 1.01 compared with the industry's 1.81.
Peer Cleveland-Cliffs is a cheaper option, trading at a forward price/sales ratio of 0.29, while Nucor is trading at a higher price/sales ratio of 1.25.
Final Take on CMC Stock
Commercial Metals has delivered a strong stock performance and reported improved fiscal first-quarter results, backed by solid demand. It remains well-positioned to gain from the recent buyouts. While the stock currently has an appealing valuation, its challenging conditions in Europe suggest caution for new investors.
Existing shareholders should stay invested in CMC’s stock to benefit from its solid long-term growth prospects. The company currently has a Zacks Rank #3 (Hold), which supports our thesis.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.