Steel Dynamics (STLD): Evaluating Valuation After ITC Trade Ruling and Upbeat Q3 2025 Earnings Guidance

Steel Dynamics (STLD) caught investor attention this week after a pair of important updates. The company received a boost from the U.S. International Trade Commission’s ruling against unfair steel imports, a move that could tighten supply and support pricing power for domestic producers like Steel Dynamics. Following that news, management released third quarter earnings guidance that came in well ahead of both the prior quarter and last year’s results, pointing to improved performance across all three of its major business divisions and highlighting strong demand from industries such as construction and manufacturing.

These events come at a time when the stock has been quietly productive. Steel Dynamics has returned 12% over the past year and is up 25% year to date, with momentum building in recent months as well. The company’s consistent operating gains, paired with optimistic outlooks driven by onshoring trends and infrastructure projects, add weight to the story. Earlier softness seems to have given way to renewed optimism, especially as input costs decline and order backlogs stay firm.

With the stock sitting higher after this string of solid news, the real question is whether investors are looking at a rare buying window or if all this upside is already built into the current share price.

Most Popular Narrative: 6.7% Undervalued

According to the most widely followed narrative, Steel Dynamics is currently undervalued based on its projected earnings growth and future profit margins. The underlying assumptions suggest that the stock's fair value is noticeably higher than its present price.

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

Steel Dynamics is being valued using a forward-looking model that relies on bold estimates for earnings, revenue, and margins. Are you wondering what level of future profits could justify this fair value, or which long-term industry trends might influence these forecasts? The actual financial targets underlying this narrative may surprise you. Analyst expectations are playing a significant role in setting the pace for this stock’s potential re-rating.

Result: Fair Value of $149.58 (UNDERVALUED)

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

However, costly investments in new operations and a slowdown in key end markets could pressure Steel Dynamics’ margins and limit its expected profit growth.

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

Another View: Discounted Cash Flow Perspective

While analysts point to upside based on future earnings, our SWS DCF model examines Steel Dynamics' intrinsic value by estimating all future cash flows. This method also suggests the shares are undervalued. However, does every approach really agree?

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 just want to dive into the numbers on your own terms, there is nothing stopping you from building a personal view in 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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