Steel · NYSE
Current Price
$359.45
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Reliance Steel & Aluminum Co. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Reliance Steel & Aluminum Co. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It also distributes non-ferrous metals products and tubular building products; and manufactures specialty extruded metals, fabricated parts, and welded components. As of December 31, 2021, the company operated a network of approximately 315 locations in 40 states in the United States and 13 in other countries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was founded in 1939 and is headquartered in Los Angeles, California.
ROIC (TTM)
8.7%
ROE (TTM)
11.2%
FCF Yield
3.33%
Based on trailing twelve-month data, RS shows a free cash flow per share of N/A and a ROIC of 8.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.33% are important context metrics when evaluating RS's stock valuation relative to peers.
The intrinsic value of RS depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether RS is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $359.45. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Reliance Steel & Aluminum Co.: (1) Start with the trailing free cash flow per share 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 RS's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Reliance Steel & Aluminum Co., this means projecting how much free cash flow the Steel will produce over the next 5-10 years, then discounting those amounts to today's dollars. RS's ROIC of 8.7% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RS, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
