Olympic Steel is expected to release its results on August 5th
Steel stocks have had a great year and some could be even bigger summerwhile others have made fascinating offers Entry points. Lesser known iron and steel inventory Olympic Steel, Inc. (NASDAQ: ZEUS) started the summer with a breakout on June 2 to a 13-year high of $ 40. But since then, steel stocks have struggled and lagged in the company’s earnings report, which is slated for the first week of August.
Olympic Steel will publish its results for the second quarter after the market closes on August 5th. Looking back over the past four quarters, Olympic Steel met or exceeded earnings expectations across the board. However, regardless of direction, the stock has recorded a calm after-earnings movement of 4.2% on average over the past eight quarters.
Olympic Steel stock is up 122% in 2021 and 192% year over year. Despite the upward trend, the individual analyst in the coverage recommends a “hold” rating. Olympic Steel stock also has a forward dividend of $ 0.08 and a dividend yield of 0.30%.
Olympic Steel stock has an intriguing valuation. ZEUS is traded at a price-earnings-ratio of 20.81, but has an astonishing price-earnings-ratio of 8.85. However, Olympic Steel fundamentals are plagued by inconsistencies and uncertainties. For starters, the company’s balance sheet contains only $ 8.31 million in cash on total debt of $ 223.96 million. Additionally, Olympic Steel experienced massive sales and net profit losses between fiscal 2018 and fiscal 2020. During that period, sales declined 18% and the company lost approximately $ 40 million, bringing Olympic Steel to $ 5.6 million in net losses in fiscal 2020.
That said, Olympic Steel’s last 12 month sales are up 9%, and net income for the last 12 months has increased more than $ 20 million since fiscal 2020. Overall, ZEUS has some potential as a turnaround game, but Olympic Steel stock could already be priced in a large part of that recovery, making the risk / reward ratio far less attractive.