STLD Intrinsic Value

STLD

Steel Dynamics Inc. – Iron and Steel Mills and Ferroalloy Manufacturing

steel dynamics, inc. is unique among american steel companies. founded in 1993, sdi began production at its butler, in, flat roll mill in 1996. this state-of-the-art mill remains a world leader in its productivity and production of flat roll steel. finishing facilities at the butler mill and in jeffersonville, in, produce pickled, cold roll, galvanized, and painted flat roll steel. new millennium building systems, a steel fabrication business producing joists, girders, and decking for nonresidential construction projects, began operations in 2000, and today consists of 6 manufacturing facilities in the u.s. and mexico. sdi entered the steel long-products business in 2002, with the production of wide-flange beams at the company’s minimill in columbia city, in. in 2010, it was expanded to include production of standard rail, and in 2013 the capability for manufacturing premium rail was added. also in 2002, sdi acquired a steel mill near indianapolis to produce engineered bar steel and

Analysis Results

Intrinsic Value	$710.14
Latest Price	$106.44
Relative Value	85% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 26.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 26.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2023	4.41	4.03
2024	5.57	4.65
2025	7.04	5.38
2026	8.9	6.21
2027	11.3	7.18

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 155 billion. This corresponds to a present value of 90.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 27.4 billion. Adding in the terminal value gives a total present value of 118 billion.

There are presently 166.0 million outstanding shares, so the intrinsic value per share is 710.14.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	7,638,018,000
Current Cash	2,256,632,000
Current Liabilities	2,032,296,000
Current Debt	57,334,000
Non-Cash Working Capital (NCWC)	3,406,424,000
Change in NCWC	-120,536,000
EBIT	5,091,822,000
Tax Provision	1,141,577,000
Depreciation and Amortization	384,202,000
Capital Expenditure	-908,902,000
Unlevered Free Cash Flow	3,288,922,784

Current Assets	6,901,023,000
Current Cash	1,243,868,000
Current Liabilities	2,227,369,000
Current Debt	97,174,000
Non-Cash Working Capital (NCWC)	3,526,960,000
Change in NCWC	1,809,024,000
EBIT	4,301,105,000
Tax Provision	962,256,000
Depreciation and Amortization	347,653,000
Capital Expenditure	-1,006,239,000
Unlevered Free Cash Flow	4,468,246,430

Current Assets	4,258,447,000
Current Cash	1,368,618,000
Current Liabilities	1,258,787,000
Current Debt	86,894,000
Non-Cash Working Capital (NCWC)	1,717,936,000
Change in NCWC	25,887,000
EBIT	866,551,000
Tax Provision	134,650,000
Depreciation and Amortization	325,789,000
Capital Expenditure	-1,198,055,000
Unlevered Free Cash Flow	-145,220,956

Current Assets	4,253,025,000
Current Cash	1,643,634,000
Current Liabilities	1,006,698,000
Current Debt	89,356,000
Non-Cash Working Capital (NCWC)	1,692,049,000
Change in NCWC	-288,702,000
EBIT	986,880,000
Tax Provision	197,437,000
Depreciation and Amortization	321,082,000
Capital Expenditure	-451,945,000
Unlevered Free Cash Flow	344,718,872

Current Assets	4,032,657,000
Current Cash	1,057,003,000
Current Liabilities	1,019,137,000
Current Debt	24,234,000
Non-Cash Working Capital (NCWC)	1,980,751,000
Change in NCWC	340,782,000
EBIT	1,722,409,000
Tax Provision	363,969,000
Depreciation and Amortization	317,198,000
Capital Expenditure	-239,390,000
Unlevered Free Cash Flow	1,753,967,549

Current Assets	3,508,342,000
Current Cash	1,028,649,000
Current Liabilities	868,519,000
Current Debt	28,795,000
Non-Cash Working Capital (NCWC)	1,639,969,000
Change in NCWC	260,960,000
EBIT	1,066,881,000
Tax Provision	129,439,000
Depreciation and Amortization	298,999,000
Capital Expenditure	-164,935,000
Unlevered Free Cash Flow	1,314,245,845

Current Assets	2,929,675,000
Current Cash	841,483,000
Current Liabilities	712,815,000
Current Debt	3,632,000
Non-Cash Working Capital (NCWC)	1,379,009,000
Change in NCWC	86,710,000
EBIT	860,805,000
Tax Provision	204,127,000
Depreciation and Amortization	296,109,000
Capital Expenditure	-198,160,000
Unlevered Free Cash Flow	733,988,617

Current Assets	2,537,941,000
Current Cash	727,032,000
Current Liabilities	535,290,000
Current Debt	16,680,000
Non-Cash Working Capital (NCWC)	1,292,299,000
Change in NCWC	-515,981,000
EBIT	355,716,000
Tax Provision	-96,947,000
Depreciation and Amortization	294,595,000
Capital Expenditure	-114,501,000
Unlevered Free Cash Flow	19,829,000

Current Assets	2,973,765,000
Current Cash	361,363,000
Current Liabilities	850,582,000
Current Debt	46,460,000
Non-Cash Working Capital (NCWC)	1,808,280,000
Change in NCWC	363,436,000
EBIT	580,320,000
Tax Provision	73,153,000
Depreciation and Amortization	263,325,000
Capital Expenditure	-111,785,000
Unlevered Free Cash Flow	837,702,697

Current Assets	2,473,634,000
Current Cash	395,156,000
Current Liabilities	975,178,000
Current Debt	341,544,000
Non-Cash Working Capital (NCWC)	1,444,844,000
Change in NCWC	136,102,000
EBIT	386,833,000
Tax Provision	99,314,000
Depreciation and Amortization	230,928,000
Capital Expenditure	-186,843,000
Unlevered Free Cash Flow	420,849,728

Current Assets	2,296,225,000
Current Cash	407,437,000
Current Liabilities	609,677,000
Current Debt	29,631,000
Non-Cash Working Capital (NCWC)	1,308,742,000
Change in NCWC	-14,586,000
EBIT	399,415,000
Tax Provision	61,785,000
Depreciation and Amortization	225,216,000
Capital Expenditure	-223,525,000
Unlevered Free Cash Flow	265,589,243

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