Commercial Metals Company (CMC) Bundle
Understanding Commercial Metals Company (CMC) Revenue Streams
Revenue Analysis
Commercial Metals Company (CMC) reported total revenue of $6.8 billion for the fiscal year 2023, with a complex revenue structure across multiple business segments.
| Revenue Segment | Revenue Amount | Percentage of Total Revenue |
|---|---|---|
| Steel Products | $4.2 billion | 61.8% |
| Fabrication Services | $1.6 billion | 23.5% |
| Recycling Operations | $1.0 billion | 14.7% |
The company's revenue growth demonstrated significant performance with a 12.4% year-over-year increase from 2022 to 2023.
- Steel Products segment experienced 15.2% revenue growth
- Fabrication Services saw 9.7% revenue increase
- Recycling Operations reported 8.3% revenue expansion
Geographic revenue distribution reveals 68% of revenues generated domestically within the United States, with 22% from international markets and 10% from strategic international partnerships.
A Deep Dive into Commercial Metals Company (CMC) Profitability
Profitability Metrics Analysis
Commercial Metals Company's financial performance reveals critical profitability insights for investors.
| Profitability Metric | 2023 Value | 2022 Value |
|---|---|---|
| Gross Profit Margin | 17.3% | 15.8% |
| Operating Profit Margin | 10.2% | 9.5% |
| Net Profit Margin | 7.6% | 6.9% |
Key profitability performance indicators demonstrate consistent improvement across critical financial metrics.
- Revenue for fiscal year 2023: $6.4 billion
- Net income: $486 million
- Return on Equity (ROE): 14.7%
- Return on Assets (ROA): 8.3%
| Efficiency Ratios | 2023 Performance |
|---|---|
| Asset Turnover Ratio | 1.2x |
| Inventory Turnover | 5.6x |
Operational efficiency metrics indicate robust financial management and strategic resource allocation.
Debt vs. Equity: How Commercial Metals Company (CMC) Finances Its Growth
Debt vs. Equity Structure Analysis
Commercial Metals Company's financial structure reveals a nuanced approach to capital management as of 2024.
Debt Overview
| Debt Category | Amount |
|---|---|
| Total Long-Term Debt | $1.2 billion |
| Short-Term Debt | $375 million |
| Total Debt | $1.575 billion |
Debt-to-Equity Metrics
The company's debt-to-equity ratio stands at 1.45, which is slightly above the industry median of 1.3.
Financing Characteristics
- Credit Rating: BBB- from Standard & Poor's
- Recent Bond Issuance: $500 million at 5.75% interest rate
- Weighted Average Cost of Debt: 4.9%
Capital Structure Breakdown
| Capital Source | Percentage |
|---|---|
| Debt Financing | 58% |
| Equity Financing | 42% |
Assessing Commercial Metals Company (CMC) Liquidity
Liquidity and Solvency Analysis
Commercial Metals Company's liquidity metrics reveal critical financial insights for investors.
Current and Quick Ratios
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.87 | 1.65 |
| Quick Ratio | 1.23 | 1.09 |
Working Capital Trends
Working capital analysis demonstrates financial flexibility:
- Working Capital: $456 million (2023)
- Year-over-Year Working Capital Growth: 12.4%
- Net Working Capital Turnover: 3.2x
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $612 million |
| Investing Cash Flow | -$287 million |
| Financing Cash Flow | -$198 million |
Liquidity Strengths
- Cash and Cash Equivalents: $289 million
- Debt-to-Equity Ratio: 0.65
- Interest Coverage Ratio: 4.7x
Is Commercial Metals Company (CMC) Overvalued or Undervalued?
Valuation Analysis: Is the Company Overvalued or Undervalued?
The valuation analysis reveals critical insights into the company's current market positioning and investor attractiveness.
Key Valuation Metrics
| Metric | Current Value | Industry Average |
|---|---|---|
| Price-to-Earnings (P/E) Ratio | 9.2x | 11.5x |
| Price-to-Book (P/B) Ratio | 1.3x | 1.6x |
| Enterprise Value/EBITDA | 6.7x | 8.3x |
Stock Price Performance
| Time Period | Price Change |
|---|---|
| Last 12 Months | +14.3% |
| Year-to-Date | +8.6% |
Dividend Characteristics
- Current Dividend Yield: 2.4%
- Dividend Payout Ratio: 35%
- Dividend Growth Rate (5-Year): 6.2%
Analyst Recommendations
| Recommendation | Percentage |
|---|---|
| Buy | 45% |
| Hold | 40% |
| Sell | 15% |
Comparative Valuation Insights
Compared to industry benchmarks, the company demonstrates attractive valuation metrics with lower P/E, P/B, and EV/EBITDA ratios.
Key Risks Facing Commercial Metals Company (CMC)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic objectives:
Market and Industry Risks
| Risk Category | Potential Impact | Magnitude |
|---|---|---|
| Steel Price Volatility | Revenue Fluctuation | ±15.7% annual price variance |
| Raw Material Cost | Margin Compression | $687 per metric ton fluctuation |
| Global Supply Chain Disruption | Operational Constraints | 22% potential production delay risk |
Operational Risks
- Manufacturing Equipment Depreciation: $42.3 million annual replacement cost
- Energy Consumption Expenses: $89.6 million annual utility expenditure
- Workforce Training and Compliance: $7.2 million annual investment
Financial Risks
Key financial risk indicators include:
- Debt-to-Equity Ratio: 1.45:1
- Interest Expense: $23.4 million annually
- Working Capital Ratio: 1.32
Regulatory Compliance Risks
| Regulatory Area | Potential Fine | Compliance Cost |
|---|---|---|
| Environmental Regulations | $1.2 million potential penalty | $5.6 million annual compliance investment |
| Safety Standards | $850,000 potential fine | $3.4 million annual safety upgrades |
Technology and Cybersecurity Risks
Technology-related risk assessment:
- Cybersecurity Investment: $4.7 million annually
- Potential Data Breach Cost: $6.2 million estimated impact
- Digital Infrastructure Upgrade: $12.3 million planned expenditure
Future Growth Prospects for Commercial Metals Company (CMC)
Growth Opportunities
Commercial Metals Company (CMC) demonstrates significant potential for future growth through strategic initiatives and market positioning.
Key Growth Drivers
- Metal recycling market projected to reach $67.7 billion by 2027
- Steel scrap processing capacity expansion
- Advanced manufacturing technology investments
Revenue Growth Projections
| Year | Projected Revenue | Growth Rate |
|---|---|---|
| 2024 | $6.2 billion | 4.7% |
| 2025 | $6.5 billion | 5.2% |
| 2026 | $6.8 billion | 5.5% |
Strategic Competitive Advantages
- Integrated steel manufacturing capabilities
- Geographic diversification across 14 states
- Advanced recycling infrastructure
- Cost-efficient production models
Market Expansion Strategies
Focused expansion in construction, infrastructure, and automotive sectors with anticipated market penetration of 7.3% annually.
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