Is Gerdau S.A. (GGB) Stock Cheap Or Risky?


As of Thursday close, Gerdau S.A.’s (NYSE:GGB) stock was down -$0.1, moving down -2.04 percent to $4.80. The average number of shares traded per day over the past five days has been 8,900,561 shares. 3 times new highs have been achieved over the past 5 days, with a -$0.04 fall in that time frame. In the last twenty days, the average volume was 7,439,695, while in the previous 50 days, it was 7,128,416.

Since last month, GGB stock rose 3.81%. Shares of the company fell to $4.66 on 05/16/23, the lowest level in the past month. A 52-week high of $6.21 was reached on 01/18/23 after having rallying from a 52-week low of $3.63. Since the beginning of this year, GGB’s stock price has dropped by -7.13% or -$0.48, and marked a new high 10 times. However, the stock has declined by -22.69% since its 52-week high.

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Valuation Metrics

Right now, Gerdau S.A. (GGB) has a P/E ratio of about 3.61. The stock’s beta is 1.62. Besides these, the trailing price-to-sales (P/S) ratio of 0.51, the price-to-book (PB) ratio of 0.86.

The latest dividend of $0.1010 per share was paid out, which is 28.17% more than last year’s $0.0788. On Wednesday May 3 2023, a $0.0222 dividend increase was announced.

Financial Health

In the three months ended March 30, Gerdau S.A.’s quick ratio stood at 1.20, while its current ratio was 2.50, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending March 30 was 0.21, and the total debt-to-equity ratio was 0.27. On the profitability front, the trailing twelve-month gross margin is 21.20% percent. In the year ended March 30, EBITDA margin amounted to 23.58%, whereas operating margins totaled 21.30%. Based on annual data, GGB earned $3.63 billion in gross profit and brought in $15.96 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 22.40%. Return on equity (ROE) for the past 12 months was 24.50%.

According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. GGB’s revenue rose 4.94% during the quarter, while net income inched up to $15.66 billion. While analysts expected Gerdau S.A. to report $0.32 quarterly earnings, the actual figure was $0.27 per share, beating the consensus estimate by -15.60%. During the quarter, the company generated $963.89 million in EBITDA. The liabilities of Gerdau S.A. were 5.19 billion at the end of its most recent quarter ended March 30, and its total debt was $13.39 billion.

Technical Picture

This quick technical analysis looks at Gerdau S.A.’s (GGB) price momentum. With a historical volatility rate of 48.18%, the RSI 9-day stood at 44.94% on 25 May.

With respect to its five-day moving average, the current Gerdau S.A. price is down by -0.83% percent or -$0.04. At present, GGB shares trade -1.23% below its 20-day simple moving average and -9.03% percent below its 100-day simple moving average. However, the stock is currently trading approximately +5.00% above its SMA50 and +1.61% above its SMA200.

Stochastic coefficient K was 55.82% and Stochastic coefficient D was 64.95%, while ATR was 0.17. Given the Stochastic reading of 32.53% for the 14-day period, the RSI (14) reading has been calculated as 46.42%. As of today, the MACD Oscillator reading stands at 0.03, while the 14-day reading stands at 0.01.

Analyst Ratings

Gerdau S.A. (GGB) has been rated Overweight by analysts. According to 0 brokerage firms, GGB is a sell, and 4 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 0 analysts rate Gerdau S.A. stock as buy, with 11 recommending it as overweight.

With a median target price of $6.75, the current consensus forecast for the stock is $5.71 – $7.98. Based on these forecasts, analysts predict Gerdau S.A. (GGB) will achieve an average price target of $6.79.


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