Worthington Steel Valuation

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

WS ($43.3) is trading below our estimate of [[fair value]] ($52.5)

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

Valuation Score

3/6

Valuation Score 3/6

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

Share Price vs Fair Value

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

Below Fair Value: WS ($43.3) is trading below our estimate of fair value ($52.5)

Significantly Below Fair Value: WS is trading below fair value, but not by a significant amount.

Key Valuation Metric

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

Key metric: As WS is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for WS. This is calculated by dividing WS's market cap by their current earnings.
What is WS's PE Ratio?
PE Ratio	17.6x
Earnings	US$124.60m
Market Cap	US$2.19b

WS 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	0.7x
Enterprise Value/EBITDA	10x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for WS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	11x
ARCH Arch Resources	16.8x	43.3%	US$3.0b
AMR Alpha Metallurgical Resources	8.6x	6.4%	US$3.1b
HCC Warrior Met Coal	9.3x	-3.8%	US$3.4b
SIM Grupo Simec. de	9.4x	n/a	US$4.2b
WS Worthington Steel	17.6x	7.7%	US$2.2b

Price-To-Earnings vs Peers: WS is expensive based on its Price-To-Earnings Ratio (17.6x) compared to the peer average (11x).

Price to Earnings Ratio vs Industry

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

5 Companies	Price / Earnings	Estimated Growth	Market Cap
VITF.F Victoria Gold	2.1x	n/a	US$23.43m
BMXI Brookmount Explorations	0.7x	n/a	US$6.14m
RMRI Rocky Mountain Industrials	0.9x	n/a	US$1.76m
ZCRM.F Zincore Metals	0.5x	n/a	US$852.33k

5 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: WS is good value based on its Price-To-Earnings Ratio (17.6x) compared to the US Metals and Mining industry average (18.8x).

Price to Earnings Ratio vs Fair Ratio

What is WS'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.

WS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.6x
Fair PE Ratio	19.4x

Price-To-Earnings vs Fair Ratio: WS is good value based on its Price-To-Earnings Ratio (17.6x) compared to the estimated Fair Price-To-Earnings Ratio (19.4x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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