Is Olympic Steel, Inc. overvalued or undervalued?

Jun 25 2025 08:29 AM IST
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As of April 11, 2025, Olympic Steel, Inc. is considered overvalued with a P/E ratio of 21, low returns on equity and capital, and a significant stock decline of 33.63% over the past year compared to the S&P 500's 10.26% gain.
As of 11 April 2025, Olympic Steel, Inc. has moved from a fair to an expensive valuation grade. The company is currently overvalued, with a P/E ratio of 21, which is significantly higher than its peers such as Insteel Industries, Inc. at 28.50 and NL Industries, Inc. at 4.72. Additionally, the EV to EBITDA ratio stands at 8.22, indicating a premium compared to the industry average.

The company's financial metrics reflect a challenging position, with a return on equity (ROE) of only 2.87% and a return on capital employed (ROCE) of 4.94%. These figures suggest that the company is not generating sufficient returns relative to its cost of capital. Furthermore, Olympic Steel's stock has underperformed the S&P 500 over the past year, declining by 33.63% compared to the index's 10.26% gain, reinforcing the notion that the stock is currently overvalued.
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