Is Steel Dynamics, Inc. overvalued or undervalued?

As of 24 February 2025, the valuation grade for Steel Dynamics, Inc. has moved from expensive to fair. The company appears to be fairly valued at this time. Key ratios include a P/E ratio of 24, an EV to EBITDA of 16.16, and a Price to Book Value of 3.26. In comparison, peer Nucor Corp. has a P/E of 23.38 and an EV to EBITDA of 12.18, indicating that Steel Dynamics is slightly higher in terms of valuation metrics.
The company's return on capital employed (ROCE) stands at 12.42%, while its return on equity (ROE) is 13.37%, reflecting solid profitability. Notably, Steel Dynamics has outperformed the S&P 500 over the last three years with a return of 93.13% compared to the index's 58.74%, which supports the notion of its fair valuation in the current market context.