Commercial Metals Company (CMC) Intrinsic Value & DCF Valuation
Steel · NYSE
Current Price
$68.09
Intrinsic Value
$47.29
-44.0% margin of safety
What Is Commercial Metals Company's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Commercial Metals Company (CMC) at $47.29 per share, compared with a market price of $68.09, a margin of safety of -44.0%. The base case assumes 1.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $41.38 to $54.29. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Commercial Metals Company (CMC) Undervalued?
At the current price of $68.09, CMC trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Integrated Steel Production
CMC operates an integrated model from scrap collection to finished steel products. This vertical integration provides cost advantages and supply chain control.
↑Scale and Geographic Diversification
The company's significant scale and presence across North America and Europe offer operational efficiencies. This diversification mitigates regional market downturns.
↑Long-Term Customer Relationships
Established relationships with construction and industrial clients create a degree of customer stickiness. Repeat business is driven by reliability and product quality.
INVESTMENT RISKS
↓Economic Sensitivity
Demand for steel is closely tied to construction and infrastructure spending. Economic slowdowns or recessions can significantly reduce sales volumes.
↓Regulatory and Environmental Factors
The steel industry faces stringent environmental regulations and potential trade policies. Compliance costs and trade disputes can impact profitability.
↓Technological Advancements
Emerging steelmaking technologies or alternative materials could disrupt the market. Failure to adapt to new processes may lead to competitive disadvantages.
Base case
CMC base case valuation
Intrinsic Value
$47.29
Margin of safety
-44.0%
Expected annual return
-7.0%
Base case assumptions: 1.2% annual growth, 10.0% discount rate, 19x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CMC valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Commercial Metals Company respond.
Open DCF Calculator for CMCCompany Overview
Commercial Metals Company (CMC) is an international enterprise specializing in the production, recycling, and fabrication of steel and metal products, along with providing related services. The company serves markets across the United States, Poland, China, and other international regions. A significant facet of its business involves processing and marketing a wide array of ferrous and non-ferrous scrap metals. These raw materials are supplied to a diverse clientele, including steel mills, foundries, aluminum sheet and ingot producers, brass and bronze ingot makers, copper refineries, secondary lead smelters, specialty steel manufacturers, and high-temperature alloy fabricators. Commercial Metals Company manufactures and distributes a comprehensive range of finished long steel products. These encompass reinforcing bars (rebar), merchant bars, light structural sections, and various other specialized profiles. It also provides semi-finished billets intended for re-rolling and forging applications. Specializing in custom-fabricated steel products, the company's offerings are primarily utilized for concrete reinforcement. Such products are integral to the construction of a wide array of structures, from commercial and residential buildings, healthcare facilities, and convention centers to industrial and power plants, highways, bridges, and expansive public venues like arenas, stadiums, and dams. Beyond its fabrication activities, CMC supplies construction-related equipment and products, both for sale and rent, catering to concrete installers and other commercial enterprises. Additionally, the firm produces niche items such as robust strength bars for the truck trailer industry, specialized bar steels engineered for the energy market, and armor plates designated for military vehicles. These diverse metal solutions, including various rebar forms, merchant bars, wire rods, fabricated meshes, and pre-assembled rebar cages, reach a broad customer base encompassing fabricators, manufacturers, distributors, and construction firms. Founded in 1915, Commercial Metals Company maintains its corporate headquarters in Irving, Texas.
Financial Metrics — CMC Stock Valuation Data
Revenue/Share (TTM)
$79.76
FCF/Share (TTM)
$3.65
ROIC (TTM)
8.5%
ROE (TTM)
13.6%
P/FCF
18.6x
EV/EBITDA
9.0x
FCF Yield
5.38%
Debt/Equity
0.75x
On a trailing twelve-month basis, CMC generates free cash flow per share of $3.65 alongside a ROIC of 8.5%, both central inputs for a DCF valuation. Its P/FCF ratio of 18.6x and FCF yield of 5.38% then frame how CMC is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of CMC?
Commercial Metals Company currently generates $3.65 in free cash flow per share. At the current price of $68.09, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is CMC undervalued?
CMC trades at a P/FCF ratio of 18.6x with a free cash flow yield of 5.38%. This P/FCF is in a moderate range. However, whether CMC is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value CMC stock using DCF?
To perform a DCF valuation on Commercial Metals Company: (1) Start with the trailing free cash flow per share ($3.65) as the base, (2) project future FCF growth over 5-10 years based on Steel industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CMC's risk profile — with a debt-to-equity of 0.75x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to CMC?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Commercial Metals Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Steel trends, then discounting those amounts to today's dollars. CMC's ROIC of 8.5% shows moderate capital returns.
How does WACC affect CMC stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CMC, with a debt-to-equity ratio of 0.75x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 9.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See CMC PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value CMC with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.