Now trading at a price of $5.82, Gerdau has moved 3.2% so far today on a volume of 2,335,211, compared to its average of 12,883,216. In contrast, the S&P 500 index moved 1.0%.
Gerdau shares moved 15.8% over the last 52 weeks, with a high of $6.62 and a low of $3.94. During this time, the stock underperformed the S&P 500 index by 34.4%. As of January 2022, the company's 50-day average price is $6.0. Gerdau S.A., together with its subsidiaries, operates as a steel producer company in the Americas. The mid-cap Basic Materials company has 30,000 full time employees and is based in São Paulo, Brazil. Gerdau has returned a 64.4% dividend yield over the last 12 months.
Exceptional EPS Growth with Low Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | |
|---|---|---|---|
| Revenue (MM) | $39,644 | $43,815 | $78,345 |
| Revenue Growth | n/a | 10.52% | 78.81% |
| Gross Margins | 10.6% | 13.5% | 26.6% |
| Gross Margins Growth | n/a | 27.36% | 97.04% |
| Operating Margins | 8.1% | 12.6% | 25.6% |
| Operating Margins Growth | n/a | 55.56% | 103.17% |
| Earnings Per Share | $0.72 | $1.4 | $9.12 |
| EPS Growth | n/a | 94.44% | 551.43% |
| Free Cash Flow (MM) | -$204 | $4,603 | $9,325 |
| FCF Growth | n/a | 2354.98% | 102.58% |
| Capital Expenditures (MM) | -$1,847 | -$1,805 | -$3,192 |
| Net Debt / EBITDA | 2.79 | 1.68 | 0.42 |
The Market Is Undervaluing Gerdau:
Compared to the Basic Materials sector's average of 8.57, Gerdau has a trailing twelve month price to earnings (P/E) ratio of 3.9 and, based on its EPS guidance of 0.8, an expected P/E ratio of 7.3. The firm's price to earnings growth (PEG) is -5.06, however, which tells us that the company is expected to have negative growth in the future.
Gerdau is undervalued in terms of its assets because its price to book (P/B) ratio is 0.2 compared to its sector average of 1.86. The company's shares are currently trading -88.3% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:
√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 3.75 * 29.473) = $49.87
Gerdau Is the Subject of Mixed Market Indicators:
2 analysts are following Gerdau and have set target prices ranging from $7 to $7.3 per share. On average, they have given the company a rating of strong buy. At the current price of $5.82, GGB is trading -18.62% away from its average analyst target price of $7.15 per share, implying an analyst consensus of some upside potential for the stock.
