Worthington Steel

Worthington Steel has just $42 million of long-term debt, or 2% of capital, and the stock still trades at 21.7 times trailing earnings.

If you own WS, your bet is really on steadier steel spreads and auto launches showing up on schedule.

ws

materials · steel small cap updated feb 27, 2026
$46.90
market cap ~$2B · 52-week range $21–$49
xvary composite: 55 / 100 · below average
our overall rating — combines growth, value, risk, and momentum
Start here if you're new
what it is
Worthington Steel buys steel, processes it into higher-value products, and sells it to car, construction, energy, and industrial customers.
how it gets paid
Last year Worthington Steel made $3.1B in revenue.
why growth slowed
Revenue fell 9.8% last year. On operations, we expect incremental volume from recently won cold-rolled automotive programs, with shipping planned for early-tomid 2026.
what just happened
Latest quarter revenue hit $1.7B and EPS reached $1.10, well ahead of the prior year.
At a glance
B+ balance sheet — decent shape, but not bulletproof
21.7x trailing p/e — priced about right
1.5% dividend yield — cash in your pocket every quarter
16.5% return on capital — nothing to write home about
$3.00 fy2027 eps est
xvary composite: 55/100 — below average
What they do
Worthington Steel buys steel, processes it into higher-value products, and sells it to car, construction, energy, and industrial customers.
Worthington Steel wins by doing the annoying, precision-heavy work others would rather skip. It runs about 30 facilities with 4,600 employees, which means your customers can get processed steel close to where they build things. Tailor welded blanks and electric steel laminations are value-added processing (extra manufacturing steps that raise usefulness and price), so what: this is not just a warehouse full of commodity metal.
steel mid-cap metal-processing auto-exposure industrial
How they make money
$3.1B annual revenue · revenue declined -9.8% last year
total revenue
$3.1B
9.8%
The products that matter
steel processing and cutting
Carbon Flat-Rolled Steel
$2.5B · 80.6% of revenue
It is the core business, but sales fell 9.8% and steel EBITDA dropped from $92M to $20M in two years.
profit pressure
laser-welded automotive components
Tailor Welded Blanks
$0.4B · 12.9% of revenue
This segment grew 26% from a year ago, making it the clearest bright spot in an otherwise mixed demand picture.
growth pocket
motor and transformer components
Electrical Steel Laminations
$0.2B · 6.5% of revenue
Revenue was flat, so the next leg depends on new Mexico and Canada capacity actually contributing in 2026.
capacity bet
Key numbers
16.5%
return on capital
Return on capital means profit generated from the money used in the business. Plain English: how hard each dollar works. So what: 16.5% is solid for a steel processor.
$42M
long-term debt
That is just 2% of capital, which gives the company room to absorb a rough patch without a balance-sheet panic.
9.5%
operating margin
Operating margin is what remains after core costs. Plain English: the cut the business keeps before interest and taxes. So what: that's healthy for this industry.
$53
18-month target
That sits about 13% above the $46.9 stock price, which tells you the upside case is decent but not huge.
Financial health
B+
strength
  • balance sheet grade B+ — solid but not elite
  • risk rank 3 — safer than 50% of stocks
  • long-term debt $42M (2% of capital)
  • net profit margin 6.5% — keeps 6 cents of every dollar in revenue
  • return on equity 18% — $0.18 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market

Return history isn't available for WS right now.

same standard. no invented return math.

source: institutional data · return history unavailable
What just happened
beat estimates
Latest quarter revenue hit $1.7B and EPS reached $1.10, well ahead of the prior year.
Revenue doubled vs. prior year from the prior comparison base, while EPS rose 197%. Gross margin was 11.9%, and management pointed to automotive strength plus higher-value business wins.
$1.7B
revenue
$1.10
eps
11.9%
gross margin
the number that mattered
The 11.9% gross margin mattered most because this stock will follow spread stability more than headline sales.
source: company earnings report, 2026

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What could go wrong

The top risk for WS is carbon flat-rolled steel earnings staying depressed.

!
high
core steel earnings do not recover
Steel EBITDA fell from $92M to $20M in two years. That is the core engine of the company, not a side segment.
If that $20M run rate persists, the cheap multiple is telling you the truth.
!
high
the kloeckner deal adds complexity at the wrong time
The tender offer is €11.00 per share in cash and management has said debt would fund it. Low debt today does not guarantee low risk after closing.
You would be layering integration risk onto a business already trying to rebuild spreads and volume.
∘
med
auto strength gets canceled out by the rest of the portfolio
Direct automotive shipments rose 26%, but construction, heavy truck, and service-center demand stayed soft.
One good end market cannot carry a $4B revenue company forever.
∘
med
2026 capacity ramps arrive late or disappoint
Mexico motor laminations, Canada transformer-core capacity, and newly won cold-rolled auto programs are all part of the improvement story.
If those projects slip, investors are left with the current earnings base and a much thinner recovery case.
A company earning $20M of steel EBITDA instead of $92M does not have much room for a debt-funded execution mistake.
source: institutional data · regulatory filings · risk analysis
Pay attention to
acquisition
kloeckner tender deadline
€11.00 per share all-cash offer. Acceptance threshold is 57.5%. Offer expires March 26, 2026.
core metric
steel EBITDA
This is the number to watch because $20M versus $92M is the whole debate. If it starts rebuilding, the stock has room. If not, it does not.
end markets
auto up, construction down
Direct automotive shipments were up 26%. Watch whether that strength broadens or just keeps masking weakness elsewhere.
balance sheet
post-deal debt load
WS has only $42M of long-term debt now. That is the calm before the financing question, not the answer to it.
Analyst rankings
coverage
thin
Sell-side coverage looks limited here. In human-speak: fewer eyes on the stock means more room for both mispricing and messy narrative swings.
valuation read
13.1x
The stock trades at 13.07x trailing earnings. Cheap enough to attract interest, not cheap enough to ignore a 78% collapse in core EBITDA.
volatility
1.59
Beta: 1.59. That means WS has moved about 59% more than the market historically. You are getting cyclicality with extra swing.
source: institutional data
Institutional activity

institutions have been net buying for 3 consecutive quarters — 97 buyers vs. 74 sellers in 3q2025. total institutional holdings: 27.0M shares. net buying for 3 quarters.

source: institutional data · 1q2025-3q2025
source: institutional data
Price targets
3-5 year target range
$31 $75
$47 current price
$53 target midpoint · +13% from current · 3-5yr high: $55 (+15% · 6% ann'l return)
source: institutional data · analyst targets

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