Worthington Steel, Inc. (WS)
Valuation Overview•Is Worthington Steel, Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Fragile underlying quality score of 44/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant growth concerns.
Wall Street is broadly bullish, projecting solid upside. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
WS struggles with subpar profitability and pressured margins. This is supported by a highly conservative balance sheet featuring strong liquidity and pristine Altman Z safety.
The company is facing top-line contraction (-8.7% 3Y CAGR) however, earnings have severely contracted over the same period. However, profitability remains a major concern with severely compressed operating margins (4.8%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $871.9M | -9.8% | -8.7% | — | — | |
| EBITDA | $44.0M | — | -9.4% | — | — | |
| Net Income | $18.8M | -28.4% | -15.0% | — | — | |
| EPS (Diluted) | $0.37 | -29.6% | -15.3% | — | — | |
| Free Cash Flow | $127.4M | +4.0% | +220.0% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 12.8% | 11.6% | 12.4% | 12.4% |
| Operating Margin | 4.8% | 4.6% | 5.9% | 5.9% |
| Net Margin | 3.8% | 3.5% | 4.6% | 4.6% |
| FCF Margin | 3.9% | 4.5% | 3.9% | 3.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q1'26Latest | $0.46 | $0.27 | -41.5% | ||
| Q4'25 | $0.39 | $0.38 | -2.6% | ||
| Q3'25 | $0.74 | $0.77 | +4.1% | ||
| Q2'25 | $0.83 | $1.05 | +26.5% | ||
| Q1'25 | $0.67 | $0.35 | -47.8% | ||
| Q4'24 | $0.63 | $0.19 | -69.8% | ||
| Q3'24 | $0.55 | $0.56 | +1.8% | ||
| Q2'24 | $0.84 | $1.06 | +26.2% |
Total return is +64.0% (1Y), outperforming the benchmark by +39.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +16.8% | +7.5% | — |
| 1Y | +64.0% | +39.0% | +2.5% |
| 3YCAGR | +19.2% | -1.8% | +6.4% |
| 5YCAGR | +11.1% | -2.2% | +6.4% |
| 10YCAGR | +5.4% | -8.6% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Worthington Steel, Inc. (WS) valuation, health, and returns.
Worthington Steel, Inc. is estimated to be fairly valued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. trading near fair value (DCF: $0.00)
Worthington Steel, Inc. has multiple valuation anchors: DCF Intrinsic Value: $0.00 | Peer Relative Fair Value: $71.88 | Wall Street Analyst Target: $46.00 (implying +12.9% upside). A convergence of these signals offers higher conviction.
Worthington Steel, Inc. displays fair financial health with a composite quality score of 44/100, supported by a Altman Z-Score of 3.8 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 8.2%.
Worthington Steel, Inc. pays a 1.6% dividend yield, covered by a 29% payout ratio with 0 years of growth, supplemented by a 0.2% buyback yield.
Worthington Steel, Inc.'s current growth trajectory is Stable. The company achieved -9.8% 1Y revenue growth and -29.6% 1Y EPS growth, compared to its 3Y revenue CAGR of -8.7%.
Wall Street consensus is Buy based on 1 analysts, beating EPS expectations in 50% of recent quarters with a -2-quarter streak. The consensus price target represents a +12.9% change from current levels.
Investment risks for Worthington Steel, Inc. include: -42.3% 1-year max drawdown, high beta (1.98x market volatility). Volatility risk is characterized by a beta of 1.98x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.