Reliance Steel & Aluminum Co. (RS) Intrinsic Value & DCF Valuation
Steel · NYSE
Current Price
$403.62
Intrinsic Value
$240.88
-67.6% margin of safety
What Is Reliance Steel & Aluminum Co.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Reliance Steel & Aluminum Co. (RS) at $240.88 per share, compared with a market price of $403.62, a margin of safety of -67.6%. The base case assumes -1.6% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $210.65 to $276.68. 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 Reliance Steel & Aluminum Co. (RS) Undervalued?
At the current price of $403.62, RS 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
↑Scale and Distribution Network
Reliance Steel's extensive network of service centers provides significant geographic reach and efficient logistics. This scale allows for bulk purchasing and optimized inventory management, creating cost advantages.
↑Customer Relationships and Service
Long-standing relationships with a diverse customer base across various industries foster loyalty. Their ability to offer value-added services like cutting, fabrication, and just-in-time delivery creates switching costs.
↑Product Diversification and Specialization
Offering a broad range of steel and aluminum products, including specialized alloys, caters to niche market demands. This diversification reduces reliance on any single product or customer segment.
INVESTMENT RISKS
↓Economic Downturn Impact
Reliance's performance is closely tied to the health of key end markets like construction and manufacturing. A significant economic slowdown could reduce demand for its products.
↓Supply Chain Disruptions
Reliance relies on a steady supply of raw materials. Global supply chain issues, geopolitical events, or supplier-specific problems could disrupt operations and increase costs.
↓Acquisition Integration Challenges
While acquisitions drive growth, integrating new businesses can be complex. Failure to achieve expected synergies or operational efficiencies from acquisitions poses a risk.
Base case
RS base case valuation
Intrinsic Value
$240.88
Margin of safety
-67.6%
Expected annual return
-9.8%
Base case assumptions: -1.6% annual growth, 10.0% discount rate, 30x 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 RS valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Reliance Steel & Aluminum Co. respond.
Open DCF Calculator for RSCompany Overview
Reliance Steel & Aluminum Co. (RS) operates as a premier diversified metal solutions provider and a leading metal service center, serving clients across the United States, Canada, and globally. The company provides an extensive inventory of approximately 100,000 metal products, including alloys, aluminum, brass, copper, carbon steel, stainless steel, titanium, and various specialty steels. Beyond distribution, it offers comprehensive metal processing services to diverse sectors such as general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. Additionally, RS supplies non-ferrous metals and tubular building products, while also manufacturing bespoke extruded metals, fabricated components, and welded parts. As of December 31, 2021, its network comprised about 315 facilities spread across 40 U.S. states and 13 other countries. The company directly sells its offerings to original equipment manufacturers, largely catering to small machine shops and fabricators. Founded in 1939, Reliance Steel & Aluminum Co. is headquartered in Los Angeles, California.
Financial Metrics — RS Stock Valuation Data
Revenue/Share (TTM)
$307.87
FCF/Share (TTM)
$10.51
ROIC (TTM)
9.4%
ROE (TTM)
12.3%
P/FCF
38.2x
EV/EBITDA
14.7x
FCF Yield
2.62%
Debt/Equity
0.27x
On a trailing twelve-month basis, RS generates free cash flow per share of $10.51 alongside a ROIC of 9.4%, both central inputs for a DCF valuation. Its P/FCF ratio of 38.2x and FCF yield of 2.62% then frame how RS is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of RS?
Reliance Steel & Aluminum Co. currently generates $10.51 in free cash flow per share. At the current price of $403.62, 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 RS undervalued?
RS trades at a P/FCF ratio of 38.2x with a free cash flow yield of 2.62%. This P/FCF is in a moderate range. However, whether RS 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 RS stock using DCF?
To perform a DCF valuation on Reliance Steel & Aluminum Co.: (1) Start with the trailing free cash flow per share ($10.51) 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 — with a debt-to-equity of 0.27x, 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 RS?
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 company will produce over the next 5-10 years, shaped by Steel trends, then discounting those amounts to today's dollars. RS's ROIC of 9.4% shows moderate capital returns.
How does WACC affect RS stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For RS, with a debt-to-equity ratio of 0.27x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 14.7x, 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 RS 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 RS 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.