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    STLD · NMS · Basic Materials

    Steel Dynamics, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 207.40

    Market price

    USD 251.91

    Implied upside

    -17.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 7.2% of revenue against depreciation of 2.5%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 207.40-17.7%
    Exit multiple
    USD 365.86+45.2%
    Market price
    USD 251.91

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 24.1bnUSD 24.9bnUSD 25.7bnUSD 26.5bnUSD 27.3bnUSD 28.1bnUSD 28.9bnUSD 29.6bnUSD 30.4bnUSD 31.2bn+2.9%
    EBITUSD 3.9bnUSD 4.0bnUSD 4.1bnUSD 4.2bnUSD 4.4bnUSD 4.5bnUSD 4.6bnUSD 4.7bnUSD 4.9bnUSD 5.0bn+2.9%
    NOPATUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bn+2.9%
    Add depreciation & amortisationUSD 592.7mUSD 611.9mUSD 631.3mUSD 650.6mUSD 670.0mUSD 689.3mUSD 708.4mUSD 727.5mUSD 746.4mUSD 765.0m+2.9%
    Less capital expenditureUSD -1.7bnUSD -1.7bnUSD -1.7bnUSD -1.6bnUSD -1.6bnUSD -1.6bnUSD -1.5bnUSD -1.4bnUSD -1.4bnUSD -1.3bn-3.1%
    Capex, % of revenue7.2%6.9%6.5%6.2%5.9%5.5%5.2%4.9%4.5%4.2%-
    Less increase in working capitalUSD -1.2bnUSD -153.1mUSD -153.5mUSD -153.7mUSD -153.5mUSD -153.0mUSD -152.3mUSD -151.2mUSD -149.8mUSD -148.1m-20.5%
    Free cashflow to firmUSD 742.1mUSD 1.9bnUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.5bnUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.2bn+17.8%
    Discount factor0.95460.87000.79290.72260.65850.60020.54690.49850.45430.4140-
    Present valueUSD 708.5mUSD 1.7bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.3bn-
    Present Value Of The ForecastUSD 14.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.297Reported 1.443, pulled toward 1.0 (Blume)
    Cost of equity10.38%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 22.8x interest cover. Book interest / average debt was lower, at 1.9%.
    Market capitalisationUSD 35.8bn89.5% of capital
    Total debtUSD 4.2bn10.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.73%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 207.40

    58% of EV

    Forecast FCFF, final year
    USD 3.2bn
    Capex at depreciation, working capital in reinvestment
    USD 3.9bn
    Less reinvestment at g/ROIC (13.8% of NOPAT)
    USD -541.4m
    Capitalised
    USD 3.4bn
    ROIC (reported)
    18.2%
    Terminal value, undiscounted
    USD 48.1bn
    Terminal value, discounted
    USD 19.9bn
    Enterprise value
    USD 34.2bn
    Less net debt
    USD 3.4bn
    Equity value
    USD 30.8bn

    Exit at 18.3x EBITDA

    Value per shareUSD 365.86

    75% of EV

    Terminal value, undiscounted
    USD 104.9bn
    Terminal value, discounted
    USD 43.4bn
    Enterprise value
    USD 57.7bn
    Less net debt
    USD 3.4bn
    Equity value
    USD 54.3bn

    Spread between methods: 55%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.73%282.33291.98303.80318.48337.03
    8.73%235.92241.27247.74255.62265.31
    9.73%201.03203.91207.40211.63216.79
    10.73%173.89175.28177.02179.17181.82
    11.73%152.21152.69153.36154.27155.45

    Outlined: this model. Green text: above today's price of 251.91. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-6.5%5.5%7.9%
    EBIT margin24.9%16.0%18.6%
    Discount rate-9.7%8.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.