Is Steel Dynamics Inc (STLD) overvalued?
On Equity Rank's model estimate, STLD trades 69% above its fair value. Steel Dynamics Inc (STLD) last closed at $222.90; the multi-method model fair value is $132.05.
| Price | Model fair value | Price vs model |
|---|---|---|
| $222.90 | $132.05 | 69% above |
What the answer rests on
- 0 of 12 valuation methods put STLD's value above its price and 12 put it below, so the methods mostly agree.
- To justify today's price, STLD's free cash flow would need to grow about 27.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -47.9% a year.
- STLD trades at 17.7 times its last year's earnings, against a median of 19.2 for 8 profitable Steel companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 16% above to 172% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind STLD's fair value · What prices assume · Other companies