Commercial Metals Company (CMC) Stock Valuation — DCF Analysis
Steel · NYSE
Current Price
$77.76
Intrinsic Value
$96.97
+19.8% margin of safety
COMPETITIVE MOAT
↑Integrated Steel Production
CMC's vertical integration from scrap processing to finished steel products creates cost efficiencies and supply chain control. This allows for better margin management and responsiveness to market demands.
↑Strategic Geographic Footprint
Operating facilities in key North American and European markets provides proximity to customers and reduces transportation costs. This localized presence enhances competitive advantage in regional markets.
↑Recycling Expertise and Infrastructure
CMC's extensive scrap metal processing capabilities provide a cost-advantaged raw material source. This expertise in recycling is crucial for sustainable and economical steel production.
INVESTMENT RISKS
↓Commodity Price Volatility
Steel prices are subject to significant fluctuations based on global supply and demand. This volatility can impact CMC's revenue and profitability unpredictably.
↓Economic Downturn Impact
Demand for steel is closely tied to construction and industrial activity. A broad economic slowdown could significantly reduce CMC's sales volumes and financial performance.
↓Regulatory and Environmental Pressures
The steel industry faces increasing environmental regulations and scrutiny. Compliance costs and potential carbon taxes could negatively affect CMC's operating expenses.
Base case
CMC base case valuation
A base case discounted cash flow model for CMC estimates an intrinsic value of about $96.97 per share, against a current price of $77.76. The model assumes 10.3% annual free cash flow growth, a 10.0% discount rate, and a 22x exit multiple.
Intrinsic Value
$96.97
Margin of safety
+19.8%
Expected annual return
+4.5%
Base case assumptions: 10.3% annual growth, 10.0% discount rate, 22x exit multiple, 5 year projection. Data as of 2026-06-12.
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)
$75.58
FCF/Share (TTM)
$3.55
ROIC (TTM)
7.2%
ROE (TTM)
11.9%
P/FCF
21.9x
EV/EBITDA
12.7x
FCF Yield
4.56%
Debt/Equity
0.76x
Based on trailing twelve-month data, CMC shows a free cash flow per share of $3.55 and a ROIC of 7.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 21.9x and FCF yield of 4.56% are important context metrics when evaluating CMC's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of CMC?
Commercial Metals Company currently generates $3.55 in free cash flow per share. At the current price of $77.76, 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 21.9x with a free cash flow yield of 4.56%. 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 ($3.55) 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 0.76x, 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 7.2% suggests the company may face challenges generating returns above its cost of capital.
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 0.76x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.7x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.