Facts You Need to Understand GrafTech International Stock

GrafTech International logged a -14.9% change during today's morning session, and is now trading at a price of $5.61 per share. The S&P 500 index moved -0.8% and the Nasdaq posted a -1.4% change.

GrafTech International shares moved -33.6% over the last 52 weeks, with a high of $12.03 and a low of $4.07. During this time, the stock lagged the S&P 500 index by -26.4%. As of January 2022, the company's 50-day average price is $5.38. GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide. The mid-cap Industrials company has 1,353 full time employees and is based in Brooklyn Heights, OH. GrafTech International has returned a 0.6% dividend yield over the last 12 months.

The Company Has a Steady Stream of Positive Cash Flows:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $1,791 $1,224 $1,346
Revenue Growth n/a -31.63% 9.92%
Gross Margins 58.1% 54.0% 47.9%
Gross Margins Growth n/a -7.06% -11.3%
Operating Margins 54.4% 48.1% 37.8%
Operating Margins Growth n/a -11.58% -21.41%
Earnings Per Share $2.58 $1.62 $1.46
EPS Growth n/a -37.21% -9.88%
Free Cash Flow (MM) $741 $528 $385
FCF Growth n/a -28.82% -27.07%
Capital Expenditures (MM) -$64 -$36 -$58
Net Debt / EBITDA 1.68 1.93 1.67

GrafTech International Is Currently Fairly Valued:

Compared to the Industrials sector's average of 21.46, GrafTech International has a trailing twelve month P/E ratio of 3.1 and, according to its EPS guidance of 0.77, an expected P/E ratio of 7.3. GrafTech International's PEG ratio is -0.1 based on its -31.33% annual average growth rate of historical and projected earnings per share. This indicates that the company's shares are overvalued.

GrafTech International's P/B ratio is 5.3 compared to its sector average of 3.7. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading -16.4% 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 * 1.89 * 1.056) = $6.7

GrafTech International's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.

GrafTech International Is the Subject of Mixed Market Indicators:

5 analysts are following GrafTech International and have set target prices ranging from $3.07 to $10 per share. On average, they have given the company a rating of hold. At the current price of $5.61, EAF is trading -3.53% away from its average analyst target price of $5.81 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 2.8% of the company's shares are tied to short positions. Institutions own 95.4% of GrafTech International's shares, while the insider ownership rate stands at 0.15%. The biggest shareholder is Brookfield Asset Management Inc. with a 25% stake in the company worth approximately $357,757,359.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.