Olympic Steel (NasdaqGS:ZEUS) - Share price, News & Analysis

Q: What is the Fair Price of ZEUS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ZEUS ($26.03) is trading above our estimate of [[fair value]] ($6.89)

ZEUS fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	5/6
Financial Health	4/6
Dividends	3/6

ZEUS Stock Overview

Olympic Steel, Inc. processes, distributes, and storage metal products in the United States and internationally.

Rewards

Price-To-Earnings ratio (2.1x) is below the US market (14.7x)

Earnings grew by 761.9% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 25% per year for the next 3 years

Debt is not well covered by operating cash flow

High level of non-cash earnings

Significant insider selling over the past 3 months

Olympic Steel Competitors

Huadi International Group

NasdaqCM:HUDI

US$278.8m

Mesabi Trust

NYSE:MSB

US$328.1m

Ramaco Resources

NasdaqGS:METC

US$567.1m

Webco Industries

OTCPK:WEBC

US$172.8m

Price History & Performance

Summary of all time highs, changes and price drops for Olympic Steel
Historical stock prices
Current Share Price	US$26.03
52 Week High	US$43.18
52 Week Low	US$19.92
Beta	1.62
1 Month Change	-24.96%
3 Month Change	-25.63%
1 Year Change	-12.42%
3 Year Change	104.00%
5 Year Change	41.47%
Change since IPO	67.94%

Recent News & Updates

May 28

These 4 Measures Indicate That Olympic Steel (NASDAQ:ZEUS) Is Using Debt Reasonably Well

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Shareholder Returns

	ZEUS	US Metals and Mining	US Market
7D	-3.2%	-4.6%	-2.2%
1Y	-12.4%	-13.5%	-21.2%

Return vs Industry: ZEUS exceeded the US Metals and Mining industry which returned -13.5% over the past year.

Return vs Market: ZEUS exceeded the US Market which returned -21.2% over the past year.

Price Volatility

Is ZEUS's price volatile compared to industry and market?
ZEUS volatility
ZEUS Average Weekly Movement	9.2%
Metals and Mining Industry Average Movement	10.0%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.3%

Stable Share Price: ZEUS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: ZEUS's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1954	1,648	Rick Marabito	https://www.olysteel.com

Olympic Steel, Inc. processes, distributes, and storage metal products in the United States and internationally. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The Carbon Flat Products segment sells and distributes processed carbon and coated flat-rolled sheets, coil and plate products, and fabricated parts.

Olympic Steel Fundamentals Summary

How do Olympic Steel's earnings and revenue compare to its market cap?
ZEUS fundamental statistics
Market Cap	US$289.65m
Earnings (TTM)	US$136.35m
Revenue (TTM)	US$2.55b

2.1x

P/E Ratio

0.1x

P/S Ratio

Is ZEUS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ZEUS income statement (TTM)
Revenue	US$2.55b
Cost of Revenue	US$2.00b
Gross Profit	US$542.97m
Other Expenses	US$406.62m
Earnings	US$136.35m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	12.25
Gross Margin	21.33%
Net Profit Margin	5.36%
Debt/Equity Ratio	67.3%

How did ZEUS perform over the long term?

See historical performance and comparison

Dividends

1.4%

Current Dividend Yield

1%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ZEUS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ZEUS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ZEUS. This is calculated by dividing ZEUS's market cap by their current preferred multiple.
What is ZEUS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$289.65m

ZEUS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	2.9x
PEG Ratio	-0.08x

Price to Earnings Ratio vs Peers

How does ZEUS's PE Ratio compare to its peers?

ZEUS PE Ratio vs Peers

The above table shows the PE ratio for ZEUS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31.3x
HUDI Huadi International Group	110.1x	n/a	US$278.8m
MSB Mesabi Trust	4.4x	n/a	US$328.1m
METC Ramaco Resources	7.4x	-25.5%	US$567.1m
WEBC Webco Industries	3.2x	n/a	US$172.8m
ZEUS Olympic Steel	2.1x	-25.0%	US$289.7m

Forward PE

Price-To-Earnings vs Peers: ZEUS is good value based on its Price-To-Earnings Ratio (2.1x) compared to the peer average (31.3x).

Price to Earnings Ratio vs Industry

How does ZEUS's PE Ratio compare vs other companies in the US Metals and Mining Industry?

Price-To-Earnings vs Industry: ZEUS is good value based on its Price-To-Earnings Ratio (2.1x) compared to the US Metals and Mining industry average (8.2x)

Price to Earnings Ratio vs Fair Ratio

What is ZEUS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ZEUS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	2.1x
Fair PE Ratio	5.7x

Price-To-Earnings vs Fair Ratio: ZEUS is good value based on its Price-To-Earnings Ratio (2.1x) compared to the estimated Fair Price-To-Earnings Ratio (5.7x).

Share Price vs Fair Value

What is the Fair Price of ZEUS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ZEUS ($26.03) is trading above our estimate of fair value ($6.89)

Significantly Below Fair Value: ZEUS is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: ZEUS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Olympic Steel forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-25.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZEUS's earnings are forecast to decline over the next 3 years (-25% per year).

Earnings vs Market: ZEUS's earnings are forecast to decline over the next 3 years (-25% per year).

High Growth Earnings: ZEUS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ZEUS's revenue is expected to decline over the next 3 years (-10.9% per year).

High Growth Revenue: ZEUS's revenue is forecast to decline over the next 3 years (-10.9% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if ZEUS's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Olympic Steel performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

43.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ZEUS has a high level of non-cash earnings.

Growing Profit Margin: ZEUS's current net profit margins (5.4%) are higher than last year (1.2%).

Past Earnings Growth Analysis

Earnings Trend: ZEUS's earnings have grown significantly by 43.4% per year over the past 5 years.

Accelerating Growth: ZEUS's earnings growth over the past year (761.9%) exceeds its 5-year average (43.4% per year).

Earnings vs Industry: ZEUS earnings growth over the past year (761.9%) exceeded the Metals and Mining industry 61.3%.

Return on Equity

High ROE: ZEUS's Return on Equity (29.5%) is considered high.

Discover strong past performing companies

Financial Health

How is Olympic Steel's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ZEUS's short term assets ($814.6M) exceed its short term liabilities ($220.0M).

Long Term Liabilities: ZEUS's short term assets ($814.6M) exceed its long term liabilities ($360.9M).

Debt to Equity History and Analysis

Debt Level: ZEUS's net debt to equity ratio (65.6%) is considered high.

Reducing Debt: ZEUS's debt to equity ratio has reduced from 74.5% to 67.3% over the past 5 years.

Debt Coverage: ZEUS's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: ZEUS's interest payments on its debt are well covered by EBIT (24.3x coverage).

Balance Sheet

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Dividend

What is Olympic Steel current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.38%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ZEUS's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: ZEUS's dividend (1.38%) is low compared to the top 25% of dividend payers in the US market (4.25%).

Stability and Growth of Payments

Stable Dividend: ZEUS's dividends per share have been stable in the past 10 years.

Growing Dividend: ZEUS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (1.3%), ZEUS's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: ZEUS is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.5yrs

Average management tenure

CEO

Rick Marabito (58 yo)

3.5yrs

Tenure

US$3,620,093

Compensation

Mr. Richard T. Marabito, also known as Rick, has been an Independent Director at CBIZ, Inc. since August 12, 2021. He is the Director and Chief Executive Officer of Olympic Steel, Inc. since January 1, 201...

CEO Compensation Analysis

Compensation vs Market: Rick's total compensation ($USD3.62M) is above average for companies of similar size in the US market ($USD1.83M).

Compensation vs Earnings: Rick's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: ZEUS's management team is considered experienced (3.5 years average tenure).

Board Members

Experienced Board: ZEUS's board of directors are considered experienced (7.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: ZEUS insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31