Breaking Down Worthington Industries, Inc. (WOR) Financial Health: Key Insights for Investors

Are you keeping a close watch on Worthington Industries Inc. (WOR) and wondering about its financial stability? With the company's stock recently surging by 13.69% and closing near its 52-week high at $62.86 after reporting an impressive $0.91 adjusted earnings per share (EPS) against a forecast of $0.70, and revenue surpassing expectations at $304.5 million, it's a good time to dive deeper. But how sustainable is this growth, and what does the future hold for this prominent industrial manufacturing company?

Worthington Industries, Inc. (WOR) Revenue Analysis

Understanding Worthington Industries, Inc. (WOR)'s financial health requires a detailed look into its revenue streams. A comprehensive analysis includes breaking down where the company's revenue comes from, how quickly it's growing, and the specific contributions from its various business segments.

Here’s a breakdown of Worthington Industries, Inc. (WOR)’s revenue streams:

• Primary Revenue Sources: Worthington Industries, Inc. (WOR) operates through various segments, including Consumer Products and Building Products.
• Year-over-Year Revenue Growth Rate: According to the latest financial reports, Worthington Enterprises' current revenue is ₹99.66 Billion. This represents a decrease compared to the ₹181.92 Billion in revenue in 2023.
• In the third quarter of fiscal year 2025, net sales reached $304.5 million, a 3.9% decrease from the previous year. This decline is attributed to the deconsolidation of the former Sustainable Energy Solutions segment, although this was partially offset by volume growth and contributions from the Ragasco business acquired in Q1 2025.
• Contribution of Different Business Segments to Overall Revenue:
  • In the second quarter of fiscal year 2025, Consumer Products generated net sales of $116.7 million, a 2.2% decrease year-over-year, primarily due to a less favorable product mix.
  • Building Products saw higher earnings, driven by the inclusion of Ragasco and stronger contributions from WAVE.

A look at the fourth quarter of fiscal year 2024 shows:

• Net sales for the fourth quarter of fiscal 2024 were $318.8 million, a 13.6% decrease from the prior year quarter.
• Consumer Products generated net sales of $125.3 million during the fourth quarter of fiscal 2024, a decrease of 16% from the prior year quarter.
• Building Products generated net sales of $153.6 million during the fourth quarter of fiscal 2024, a decrease of 12% from the prior year quarter.

Here is a table summarizing the net sales for Q2 2025 and Q2 2024:

It’s worth noting that Worthington Steel, a separate entity post-separation, reported net sales of $911.0 million for the fourth quarter of fiscal year 2024, which was a 3% increase compared to the previous year.

For more insights into Worthington Industries, Inc. (WOR) and its investors, you can explore this resource: Exploring Worthington Industries, Inc. (WOR) Investor Profile: Who’s Buying and Why?

Worthington Industries, Inc. (WOR) Profitability Metrics

Worthington Industries, Inc. (WOR) profitability can be evaluated through its gross profit, operating profit, and net profit margins. These metrics provide insights into how efficiently the company generates profit from its revenue and manages its expenses.

Worthington Industries reported a gross profit of $1.34 billion for the fiscal year 2024, compared to $1.25 billion in 2023. The gross profit margin increased from 20.2% in 2023 to 21.5% in 2024. This indicates improved efficiency in managing production costs relative to revenue.

The operating income for 2024 was $441.4 million, a significant increase from $279.6 million in 2023. The operating margin also saw improvement, rising from 4.5% to 7.1%. This growth reflects better management of operating expenses and increased profitability from core business activities.

Net income attributable to Worthington Industries for 2024 stood at $276.7 million, or $5.56 per diluted share, compared to $175.5 million, or $3.44 per diluted share, the previous year. The net profit margin increased to 4.4% in 2024 from 2.8% in 2023, demonstrating enhanced overall profitability.

Here's a summary of Worthington Industries' profitability metrics for the fiscal year 2024:

• Gross Profit: $1.34 billion (2024) vs $1.25 billion (2023)
• Operating Income: $441.4 million (2024) vs $279.6 million (2023)
• Net Income: $276.7 million (2024) vs $175.5 million (2023)

The trends in profitability over time show a clear improvement in Worthington Industries' financial performance. The increase in gross profit, operating income, and net income from 2023 to 2024 indicates that the company has become more efficient and profitable.

Operational efficiency can be further analyzed by examining cost management and gross margin trends. The increase in gross margin from 20.2% to 21.5% suggests that Worthington Industries has been effective in controlling its cost of goods sold (COGS). This could be due to factors such as better supply chain management, improved production processes, or favorable pricing strategies.

For further insights into the company's investors and stock performance, check out this profile: Exploring Worthington Industries, Inc. (WOR) Investor Profile: Who’s Buying and Why?

Worthington Industries, Inc. (WOR) Debt vs. Equity Structure

Understanding how Worthington Industries, Inc. (WOR) manages its debt and equity is crucial for investors. This balance sheet analysis provides insights into the company's financial strategy, risk profile, and long-term stability.

Worthington Industries, Inc. (WOR) employs a mix of debt and equity to finance its operations and growth. Evaluating the levels of both short-term and long-term debt is essential to gauge the company's immediate and future financial obligations.

As of February 29, 2024, Worthington Industries, Inc. (WOR) reported total liabilities of $2.14 billion and total equity of $1.87 billion.

The debt-to-equity ratio is a key metric used to assess the proportion of debt relative to equity used to finance the company's assets. A lower ratio generally indicates a more financially stable company. As of February 29, 2024, Worthington Industries, Inc. (WOR)'s debt-to-equity ratio is approximately 1.14. It is important to compare this ratio with industry averages to determine whether Worthington Industries, Inc. (WOR)'s leverage is aligned with its peers.

Recent activities such as debt issuances, credit ratings, and refinancing can significantly impact the company's financial health. Keeping track of these events provides insights into Worthington Industries, Inc. (WOR)'s strategies for managing its capital structure.

Worthington Industries, Inc. (WOR) strategically balances debt financing and equity funding to optimize its capital structure. This involves considering factors such as interest rates, market conditions, and the company's growth prospects.

Here is a summary of Worthington Industries, Inc. (WOR)'s debt and equity details:

• Total Liabilities: $2.14 billion (as of February 29, 2024)
• Total Equity: $1.87 billion (as of February 29, 2024)
• Debt-to-Equity Ratio: Approximately 1.14 (as of February 29, 2024)

A detailed look at Worthington Industries, Inc. (WOR)'s balance sheet as of February 29, 2024, provides a clearer picture of its financial structure:

For further insights, check out: Breaking Down Worthington Industries, Inc. (WOR) Financial Health: Key Insights for Investors

Worthington Industries, Inc. (WOR) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Worthington Industries, Inc. (WOR), assessing these metrics provides valuable insights into its financial stability and risk profile.

Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. As of the end of fiscal year 2024, Worthington Industries reported a current ratio of 2.3x and a quick ratio of 1.4x. A current ratio above 1 indicates that Worthington Industries has more current assets than current liabilities, suggesting a strong liquidity position. The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. A quick ratio of 1.4x also suggests a healthy ability to meet short-term obligations even if inventory cannot be readily converted to cash.

Analysis of Working Capital Trends: Working capital, defined as current assets minus current liabilities, is a vital measure of a company's operational efficiency and short-term financial health. Monitoring the trends in working capital can reveal whether a company is effectively managing its resources. For Worthington Industries, the working capital has shown consistent growth over the past few years, indicating efficient management of its short-term assets and liabilities. As of the end of fiscal year 2024, the company’s working capital stood at $782.1 million.

Cash Flow Statements Overview: A review of cash flow statements provides insights into how Worthington Industries generates and uses cash. The cash flow statement is divided into three main sections:

• Operating Activities: This section shows the cash generated from the company's core business operations. Worthington Industries has demonstrated a positive trend in net cash from operating activities, with $428.7 million reported for the fiscal year 2024.
• Investing Activities: This section includes cash flows related to the purchase and sale of long-term assets. For the fiscal year 2024, Worthington Industries reported -$268.3 million in cash flow from investing activities, primarily due to capital expenditures and strategic investments.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. In fiscal year 2024, Worthington Industries reported -$86.2 million in cash flow from financing activities, reflecting dividend payments and debt management.

Overall, the company's cash flow from operating activities adequately covers its investing and financing needs, indicating sound financial management.

Potential Liquidity Concerns or Strengths: Worthington Industries exhibits several strengths in its liquidity position. The robust current and quick ratios, coupled with positive cash flow from operations, suggest a solid foundation. However, it is essential to monitor the trends in capital expenditures and debt levels, as significant increases could potentially strain liquidity. The company's strategic investments, while aimed at long-term growth, require careful management to ensure they do not adversely affect short-term financial health.

Below is a summary of Worthington Industries' key financial ratios and figures:

For further insights into Worthington Industries' financial health, you can explore: Breaking Down Worthington Industries, Inc. (WOR) Financial Health: Key Insights for Investors

Worthington Industries, Inc. (WOR) Valuation Analysis

Assessing whether Worthington Industries, Inc. (WOR) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, payout ratios, and analyst consensus.

Currently, detailed real-time data for these specific ratios and analyst ratings for Worthington Industries, Inc. (WOR) is not available. However, to provide a comprehensive valuation analysis, we can consider these metrics in a broader context:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help identify whether the stock is trading at a premium or discount to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is used to assess the overall value of a company relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure than the P/E ratio, as it takes into account a company's debt and cash.

To illustrate how these metrics can be used, consider a hypothetical scenario with example data:

In this hypothetical scenario, Worthington Industries, Inc. (WOR) has lower P/E, P/B, and EV/EBITDA ratios compared to the industry average, which might suggest it is undervalued. However, this is purely illustrative, and current real-time data should be consulted for an accurate assessment.

Analyzing stock price trends over the last 12 months (or longer) can provide insights into market sentiment and investor confidence. A consistently upward trend may indicate positive market perception, while a downward trend could suggest concerns about the company's performance or prospects. As of April 2025, specific stock trends would need to be evaluated using current market data.

Dividend yield and payout ratios are relevant for companies that distribute dividends. The dividend yield indicates the return on investment based on the dividend payments, while the payout ratio shows the proportion of earnings paid out as dividends. These metrics are important for income-seeking investors.

Analyst consensus on stock valuation (buy, hold, or sell) represents the collective opinion of financial analysts covering the stock. These ratings can influence investor decisions and provide a general sentiment overview. Keep in mind that analyst ratings are not always correct and should be considered alongside other valuation metrics.

For further insights into Worthington Industries, Inc. (WOR) and its investors, check out: Exploring Worthington Industries, Inc. (WOR) Investor Profile: Who’s Buying and Why?

Worthington Industries, Inc. (WOR) Risk Factors

Worthington Industries, Inc. (WOR) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and future prospects. Here's an overview:

Industry Competition:

The industries in which Worthington Industries operates are highly competitive. This competition can put pressure on pricing and margins, affecting profitability. Key competitors include both domestic and international players, some of whom may have greater financial resources or different cost structures. Intense rivalry can lead to decreased market share if Worthington Industries cannot effectively differentiate its products or maintain cost competitiveness.

Regulatory Changes:

Worthington Industries is subject to various federal, state, and local laws and regulations, including those relating to environmental protection, health and safety, and labor practices. Changes in these regulations can increase compliance costs. For example, stricter environmental standards may require additional investments in pollution control equipment. Failure to comply with regulations can result in fines, penalties, and legal liabilities, negatively impacting the company's financial performance.

Market Conditions:

Worthington Industries' performance is closely tied to broader economic conditions, particularly in the automotive, construction, and energy sectors. Economic downturns in these sectors can reduce demand for the company's products, leading to lower sales and earnings. Fluctuations in raw material prices, such as steel and aluminum, can also impact profitability. Additionally, global trade policies and tariffs can create uncertainty and disrupt supply chains, affecting the company's ability to source materials and sell products internationally.

Operational, Financial, and Strategic Risks:

Recent earnings reports and filings highlight several operational, financial, and strategic risks. These include:

• Supply Chain Disruptions: Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or other factors, can impact the availability and cost of raw materials.
• Cybersecurity Threats: The increasing reliance on digital technologies exposes Worthington Industries to cybersecurity risks, including data breaches and ransomware attacks.
• Integration Risks: The company's growth strategy involves acquisitions, which carry integration risks.
• Debt and Leverage: Worthington Industries has a notable debt. As of May 23, 2024, S&P Global Ratings affirmed its 'BBB-' long-term and 'A-3' short-term issuer credit ratings on Worthington Industries, with a stable outlook. The company had about $880 million of debt outstanding as of February 29, 2024.

Mitigation Strategies:

Worthington Industries employs several strategies to mitigate these risks:

• Diversification: Diversifying its product offerings and end markets reduces the company's reliance on any single sector.
• Operational Efficiency: Implementing lean manufacturing principles and investing in technology improves efficiency and reduces costs.
• Financial Management: Maintaining a strong balance sheet and managing debt levels provides financial flexibility to weather economic downturns.
• Risk Management Programs: Implementing comprehensive risk management programs identifies, assesses, and mitigates risks across the organization.

The following table summarizes key financial data for Worthington Industries, providing additional context for assessing its financial health:

Understanding these risks and mitigation strategies is essential for investors looking to make informed decisions about Worthington Industries. Further insights into the company's investor profile can be found here: Exploring Worthington Industries, Inc. (WOR) Investor Profile: Who’s Buying and Why?

Worthington Industries, Inc. (WOR) Growth Opportunities

Worthington Industries, Inc. (WOR) is focusing on strategic acquisitions, innovative product development, and market expansion to propel future growth. These strategies aim to enhance their market position and capitalize on emerging opportunities.

Key growth drivers for Worthington Industries, Inc. (WOR) include:

• Product Innovations: Worthington Industries, Inc. (WOR) emphasizes the development of innovative products to meet evolving customer needs and gain a competitive edge.
• Market Expansions: The company is actively expanding its presence in key markets to increase its customer base and revenue streams.
• Strategic Acquisitions: Worthington Industries, Inc. (WOR) leverages acquisitions to expand its product offerings, enter new markets, and enhance its operational capabilities.

While specific future revenue growth projections and earnings estimates for Worthington Industries, Inc. (WOR) are subject to market conditions and company performance, analysts generally monitor factors such as:

• New product launches and their market adoption rates.
• The successful integration of acquired businesses.
• Overall economic growth and its impact on key end markets.

Strategic initiatives and partnerships that may drive future growth for Worthington Industries, Inc. (WOR) include:

• Collaborations with technology companies to develop advanced manufacturing solutions.
• Partnerships with key customers to create customized products and services.
• Investments in research and development to drive innovation and new product development.

Worthington Industries, Inc. (WOR) possesses several competitive advantages that position the company for growth:

• Diversified Product Portfolio: Worthington Industries, Inc. (WOR) offers a wide range of products across various end markets, reducing its dependence on any single industry or customer.
• Strong Customer Relationships: The company has established long-standing relationships with key customers, providing a stable base for future growth.
• Operational Excellence: Worthington Industries, Inc. (WOR) focuses on continuous improvement in its operations to enhance efficiency, reduce costs, and improve profitability.

For additional insights into Worthington Industries, Inc. (WOR) financial health, you can read this comprehensive analysis: Breaking Down Worthington Industries, Inc. (WOR) Financial Health: Key Insights for Investors