Buying Gerdau S.A. (GGB) Stock Is A Smart Move Today?

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MNDY Stock
MNDY Stock

Gerdau S.A. (NYSE:GGB) finished Thursday with an addition of $0.17 to close at $4.82, an upside of 3.66 percent. An average of 14,774,279 shares of common stock have been traded in the last five days. There was a gain of $0.45 in the past week, and it reached a new high 25 times over the past 12 months. The last 20 days have seen an average of 14,724,175 shares traded, while the 50-day average volume stands at 15,756,084.

GGB stock has decreased by -0.82% in the last month. The company shares reached their 1-month lowest point of $4.31 on 09/16/22. With the stock rallying to its 52-week high on 04/04/22, shares of the company touched a low of $3.94 and a high of $6.48 in 52 weeks. It has reached a new high 22 times so far this year and achieved 0.11% or -$0.10 in price. In spite of this, the price is down -25.60% from the 52-week high.


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Valuation Metrics

Gerdau S.A. (GGB) has a trailing price-to-earnings (P/E) ratio of 2.64. The stock’s beta is 1.62. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.47, the price-to-book (PB) ratio at 0.91, and the price-to-cash flow ratio at 5.37.

The company has a payout ratio of 181.30%. The company’s most recent quarterly dividend payment was $0.1370 a share, representing a up of 18.1% from $0.1160 last year. Its latest increase dividend $0.0210 reported on Wednesday August 3 2022.

Financial Health

The quick ratio of Gerdau S.A. for the three months ended June 29 was 1.10, and the current ratio was 2.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.20 and a total debt to equity ratio of 0.28 for the quarter ending June 29. Its gross profit as reported stood at $3.86 billion compared to revenue of $14.52 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Gerdau S.A.’s return on assets was 21.90%.

Earnings Surprise

For the three-month period that ended June 29, Gerdau S.A. had $152.77 million in cash. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $2.94 billion in the quarter, while revenues were grew 19.64%. The analyst consensus anticipated Gerdau S.A.’s latest quarter earnings to come in at $0.45 per share, but it turned out to be $0.49, a 8.90% surprise. For the quarter, EBITDA amounted to $1.33 billion.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Gerdau S.A. (GGB) price momentum. RSI 9-day as of the close on 22 September was 59.63%, suggesting the stock is Neutral, with historical volatility in this time frame at 56.16%.

As of today, GGB’s price is $4.65 +10.30% or $0.45 from its 5-day moving average. GGB is currently trading +0.63% higher than its 20-day SMA and -14.99% lower than its 100-day SMA. However, the stock’s current price level is +11.57% above the SMA50 and -3.02% below the SMA200.

The stochastic %K and %D were 67.23% and 58.57%, respectively, and the average true range (ATR) was 0.19. With the 14-day stochastic at 86.44% and the average true range at 0.19, the RSI (14) stands at 55.59%. The stock has reached 0.11 on the 9-day MACD Oscillator while the 14-day reading was at 0.09.

Analyst Ratings

Citigroup upgraded Gerdau S.A. (NYSE: GGB) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a Neutral. The consensus rating for Gerdau S.A. (GGB) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell GGB, while 1 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 11 others rate it as a “buy”.

What is GGB’s price target for the next 12 months?

Analysts predict a range of price targets between $4.95 and $8.25, with a median target of $6.62. Taking a look at these predictions, the average price target given by analysts for Gerdau S.A. (GGB) stock is $6.67.

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