Steel Dynamics (STLD): Assessing Valuation After Upgraded Q3 2025 Guidance and New Aluminum Facility Progress

Steel Dynamics (STLD) just set the market abuzz with its new earnings guidance for the third quarter of 2025. The company is calling for earnings per share in the $2.60 to $2.64 range, a solid step up from the last quarter and year-ago levels. What’s catching investors’ attention is that all three of Steel Dynamics’ core segments—steel, metals recycling, and steel fabrication—are on track to show stronger profitability. Management is pointing to sturdy demand in sectors like construction and automotive, as well as better operating efficiencies at its new aluminum facilities. This announcement adds momentum to a stock that’s already logged a 24% gain so far this year and an impressive 239% total return in the past five years. Steel Dynamics is not just relying on existing operations; it is actively expanding and citing positive developments at its freshly commissioned Columbus aluminum mill along with ongoing repurchases of its own stock. As demand stays healthy in key end-markets and operational progress continues, the market seems to be recognizing Steel Dynamics’ evolution beyond traditional steel. With this kind of earnings upgrade and expansion news driving recent price action, the question arises: Is Steel Dynamics offering investors a bargain right now, or is the market already pricing in a new growth phase?

Most Popular Narrative: 6.6% Undervalued

According to the most widely followed narrative, Steel Dynamics is currently viewed as undervalued, with analysts projecting a fair value notably higher than its present share price. The calculation weighs future earnings growth, elevated margins, and the impact of industry catalysts.

The rapid buildout of U.S. infrastructure and accelerating domestic manufacturing and reshoring is expected to drive sustained demand growth for construction and manufacturing-grade steel. This trend could support higher volumes and pricing power for Steel Dynamics, potentially boosting revenue and margins.

Ever wonder what could propel Steel Dynamics' future value even higher? The most influential narrative is built on aggressive revenue growth, swelling profit margins, and a new earnings trajectory that redefines expectations. The details behind these bold projections might surprise you. Find out what really drives this undervaluation call.

Result: Fair Value of $149.58 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slower-than-expected adoption of new operations or a drop in construction demand could challenge these optimistic long-term growth expectations.

Find out about the key risks to this Steel Dynamics narrative.

Another View: Our DCF Model Perspective

While multiples suggest Steel Dynamics offers strong value, our SWS DCF model presents a similar narrative and indicates the company is still priced below its intrinsic worth. However, could market optimism be overshooting long-term realities?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Steel Dynamics for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Steel Dynamics Narrative

If you see the story differently or want to dive into the details yourself, it’s easy to craft your perspective in just a few minutes. Do it your way.

A great starting point for your Steel Dynamics research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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