Steel Dynamics, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Steel Dynamics, Inc. (NASDAQ:STLD), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$4.6b, statutory earnings missed forecasts by 12%, coming in at just US$2.01 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the 14 analysts covering Steel Dynamics are now predicting revenues of US$18.5b in 2025. If met, this would reflect a credible 7.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 24% to US$8.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$18.5b and earnings per share (EPS) of US$8.75 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Steel Dynamics

There were no changes to revenue or earnings estimates or the price target of US$150, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Steel Dynamics at US$155 per share, while the most bearish prices it at US$143. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Steel Dynamics' past performance and to peers in the same industry. The analysts are definitely expecting Steel Dynamics' growth to accelerate, with the forecast 16% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Steel Dynamics to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Steel Dynamics going out to 2027, and you can see them free on our platform here.

Even so, be aware that Steel Dynamics is showing 3 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.