Steel Dynamics, Inc. (STLD) receives a strong valuation score of 94 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. STLD holds a better value than 94% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
STLD has a trailing twelve month Price to Earnings (PE) ratio of 17.3. The historical average of roughly 15 shows a average value for STLD stock as investors are paying fair share prices relative to the company's earnings. STLD's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 2.28 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
STLD has a 12 month forward PE to Growth (PEG) ratio of 1.16. Markets are undervaluing STLD in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 2.27999997's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
Summary
STLD's valuation metrics are adequate at its current price due to a fairly valued PEG ratio despite strong growth. STLD's PE and PEG are around the market average resulting in a average valuation score.
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