Steel · NYSE
Current Price
$70.86
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Commercial Metals Company with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including rebar, merchant bar, light structural, and other special sections, as well as semi-finished billets for re-rolling and forging applications. In addition, the company provides fabricated steel products used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.
ROIC (TTM)
7.2%
ROE (TTM)
11.9%
FCF Yield
5.01%
Based on trailing twelve-month data, CMC shows a free cash flow per share of N/A and a ROIC of 7.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.01% are important context metrics when evaluating CMC's stock valuation relative to peers.
The intrinsic value of CMC 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 CMC is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $70.86. 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 Commercial Metals Company: (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 CMC'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 Commercial Metals Company, 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. CMC's ROIC of 7.2% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CMC, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
