📊 WS Key Takeaways
Is Worthington Steel, Inc. (WS) a Good Investment?
Worthington Steel faces structural profitability challenges with negative operating income and razor-thin margins (11.7% gross, 0.2% net) despite $3.4B in revenue, indicating severe cost pressures and limited pricing power typical of commodity steel. While strong balance sheet management (0.07x Debt/Equity) and positive free cash flow ($80M) provide a cushion, zero revenue growth, poor capital returns (0.8% ROE), and negative interest coverage signal deteriorating operational performance that creates downside risk.
Worthington Steel has a strong balance sheet and positive free cash flow, but its core profitability is currently weak, with essentially break-even operating results and a 0.2% net margin. Flat revenue, sharply lower diluted EPS, and poor returns on capital indicate that the reported net-income improvement is not yet evidence of durable, high-quality growth.
Worthington Steel, Inc. Key Strengths (WS)
- Solid free cash flow generation ($80M) and positive operating cash flow ($201.2M) demonstrate underlying cash generation ability
- Strong balance sheet with minimal leverage (0.07x Debt/Equity, only $71.4M LT debt) provides financial stability and flexibility
- Positive net income ($8.5M) and reasonable current ratio (1.46x) indicate company is not in immediate financial distress
- Low leverage, with long-term debt of $71.4 million and debt-to-equity of 0.07x
- Positive operating cash flow of $201.2 million and free cash flow of $80.0 million
- Adequate near-term liquidity, supported by a 1.46x current ratio
WS Stock Risks: Worthington Steel, Inc. Investment Risks
- Negative operating income (-$1.4M) on $3.4B revenue reveals core business is unprofitable, relying on non-operating gains
- Razor-thin profitability (11.7% gross margin, -0.0% operating margin) exposes company to commodity price swings and cost inflation with limited pricing power
- Negative interest coverage (-0.2x) and zero YoY revenue growth indicate operating challenges, while poor returns (0.8% ROE, 0.4% ROA) reflect capital inefficiency
- Quick ratio of 0.92x signals potential short-term liquidity stress despite adequate current ratio
- Operating income is negative and interest coverage is -0.2x, reflecting weak core earnings
- Flat revenue and a 92.2% decline in diluted EPS signal poor growth quality
- Thin margins, low ROE and ROA, and a quick ratio below 1.0x leave limited resilience against steel-industry cyclicality
Key Metrics to Watch
- Operating income recovery and path to positive operating margins
- Gross margin trend (cost management vs. pricing power in commodity environment)
- Free cash flow sustainability and cash burn rate
- Revenue growth acceleration or further contraction
- Debt covenant compliance and refinancing needs
- Operating margin and interest coverage
- Free cash flow after capital expenditures
Worthington Steel, Inc. (WS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 2.3% FCF margin may limit capital allocation flexibility.
WS Profit Margin, ROE & Profitability Analysis
WS vs Materials Sector: How Worthington Steel, Inc. Compares
How Worthington Steel, Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Worthington Steel, Inc. Stock Overvalued? WS Valuation Analysis 2026
Based on fundamental analysis, Worthington Steel, Inc. has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Worthington Steel, Inc. Balance Sheet: WS Debt, Cash & Liquidity
WS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Worthington Steel, Inc.'s revenue has declined by 15% over the 5-year period, indicating business contraction. The most recent EPS of $3.11 reflects profitable operations.
WS Revenue Growth, EPS Growth & YoY Performance
WS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $687.4M | $10.4M | $0.20 |
| Q2 2026 | $739.0M | $12.8M | $0.25 |
| Q1 2026 | $834.0M | $28.4M | $0.56 |
| Q3 2025 | $687.4M | $13.8M | $0.27 |
| Q2 2025 | $739.0M | -$6.0M | $-0.12 |
| Q1 2025 | $834.0M | $28.4M | $0.56 |
| Q3 2024 | $780.7M | $5.4M | $0.11 |
| Q2 2023 | $808.0M | -$6.0M | $-0.12 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Worthington Steel, Inc. Dividends, Buybacks & Capital Allocation
WS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Worthington Steel, Inc. (CIK: 0001968487)
📋 Recent SEC Filings
❓ Frequently Asked Questions about WS
What is the AI rating for WS?
Worthington Steel, Inc. (WS) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are WS's key strengths?
Claude: Solid free cash flow generation ($80M) and positive operating cash flow ($201.2M) demonstrate underlying cash generation ability. Strong balance sheet with minimal leverage (0.07x Debt/Equity, only $71.4M LT debt) provides financial stability and flexibility. ChatGPT: Low leverage, with long-term debt of $71.4 million and debt-to-equity of 0.07x. Positive operating cash flow of $201.2 million and free cash flow of $80.0 million.
What are the risks of investing in WS?
Claude: Negative operating income (-$1.4M) on $3.4B revenue reveals core business is unprofitable, relying on non-operating gains. Razor-thin profitability (11.7% gross margin, -0.0% operating margin) exposes company to commodity price swings and cost inflation with limited pricing power. ChatGPT: Operating income is negative and interest coverage is -0.2x, reflecting weak core earnings. Flat revenue and a 92.2% decline in diluted EPS signal poor growth quality.
What is WS's revenue and growth?
Worthington Steel, Inc. reported revenue of $3.4B.
Does WS pay dividends?
Worthington Steel, Inc. pays dividends, with $32.6M distributed to shareholders in the trailing twelve months.
Where can I find WS SEC filings?
Official SEC filings for Worthington Steel, Inc. (CIK: 0001968487) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is WS's EPS?
Worthington Steel, Inc. has a diluted EPS of $0.17.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is WS's fundamental grade?
Based on our AI fundamental analysis in August 2026, Worthington Steel, Inc. has a C grade with 78% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is WS stock overvalued or undervalued?
Valuation metrics for WS: ROE of 0.8% (sector avg: 14%), net margin of 0.2% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is WS's AI grade for 2026?
Our dual AI analysis gives Worthington Steel, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is WS's free cash flow?
Worthington Steel, Inc.'s operating cash flow is $201.2M, with capital expenditures of $121.2M. FCF margin is 2.3%.
How does WS compare to other Materials stocks?
Vs Materials sector averages: Net margin 0.2% (avg: 10%), ROE 0.8% (avg: 14%), current ratio 1.46 (avg: 1.6).