Value
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
- ▸Forward P/E: 10.2x
- ▸PEG: 0.04
- ▸Attractively valued
RYZ · Why this verdict
Why Ryerson Holding (RYZ) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Three of the last four quarters produced earnings misses with an average negative surprise of 169%, suggesting that despite revenue growth, cost pressures or one-time charges are repeatedly surprising analysts to the downside. Earnings | Earnings beat rate improves to at least 3 out of 4 quarters over the next year, with average surprise turning positive. | →Stable |
| CounterOne recent quarter produced a 5% beat, and metal distributors frequently experience volatile quarterly results due to inventory timing, so the miss pattern may be noise rather than signal. | ||
Ryerson delivered 38% year-over-year revenue growth and ranks as an industry growth leader among metal fabricators, with both the revenue and earnings growth components at maximum scores. Growth breakdown | Revenue growth remains above 15% year-over-year for at least 2 of the next 4 quarters as metals demand sustains. | →Stable |
| CounterMetal distribution revenue is highly correlated to commodity price inflation; a reversal in steel and aluminum prices would deflate reported revenue growth without corresponding volume gains. | ||
Free cash flow is negative at 10% of revenue with a quality score below the minimum floor at 2.0 out of 10, indicating that reported earnings are not translating into cash generation, which is a structural red flag in a capital-intensive distribution business. Quality breakdown | Free cash flow turns positive on a trailing twelve-month basis within 12 months as working capital normalizes. | →Stable |
| CounterNegative free cash flow during a high-growth phase in distribution often reflects working capital investment in inventory and receivables, which unwinds when growth moderates. | ||
Ryerson has achieved a golden cross with price above all moving averages and RSI at 60, positioning the stock technically for continued upside despite analyst targets having already been reached. Momentum breakdown | Price sustains above the 200-day moving average for at least 6 of the next 12 months without a new death cross forming. | →Stable |
| CounterThe analyst upside is currently negative at negative 15.1%, meaning the stock has already exceeded fair value estimates, which typically limits further gains without a fundamental re-rating. | ||
Three of the last four quarters produced earnings misses with an average negative surprise of 169%, suggesting that despite revenue growth, cost pressures or one-time charges are repeatedly surprising analysts to the downside.
→StableEarnings
- Expectation
- Earnings beat rate improves to at least 3 out of 4 quarters over the next year, with average surprise turning positive.
CounterOne recent quarter produced a 5% beat, and metal distributors frequently experience volatile quarterly results due to inventory timing, so the miss pattern may be noise rather than signal.
Ryerson delivered 38% year-over-year revenue growth and ranks as an industry growth leader among metal fabricators, with both the revenue and earnings growth components at maximum scores.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 15% year-over-year for at least 2 of the next 4 quarters as metals demand sustains.
CounterMetal distribution revenue is highly correlated to commodity price inflation; a reversal in steel and aluminum prices would deflate reported revenue growth without corresponding volume gains.
Free cash flow is negative at 10% of revenue with a quality score below the minimum floor at 2.0 out of 10, indicating that reported earnings are not translating into cash generation, which is a structural red flag in a capital-intensive distribution business.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive on a trailing twelve-month basis within 12 months as working capital normalizes.
CounterNegative free cash flow during a high-growth phase in distribution often reflects working capital investment in inventory and receivables, which unwinds when growth moderates.
Ryerson has achieved a golden cross with price above all moving averages and RSI at 60, positioning the stock technically for continued upside despite analyst targets having already been reached.
→StableMomentum breakdown
- Expectation
- Price sustains above the 200-day moving average for at least 6 of the next 12 months without a new death cross forming.
CounterThe analyst upside is currently negative at negative 15.1%, meaning the stock has already exceeded fair value estimates, which typically limits further gains without a fundamental re-rating.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ryerson Holding's 38% year-over-year revenue growth and attractive PEG ratio of 0.05 signal potential value in this metal distributor, but persistent free cash flow deficits and three earnings misses in four quarters indicate the growth story faces serious execution challenges.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.9 |
| Net margin | 0.0 |
| Current ratio | 7.6 |
| FCF quality | 0.0 |
| Moat | 4.2 |
| Piotroski F | 5.6 |
- ▸Cash-burning: FCF -10% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 38% YoY
Momentum
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.9 |
- ▸Capitulation risk (RSI 19, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+3.7%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.8 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 21%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $492,558 (0.040% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.0 |
| quality rank | 1.4 |
| growth rank | 9.0 |
- ▸Industry growth leader
Technical
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.9 |
| support resistance | 9.3 |
| 52w position | 5.6 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 6.5 |
| volatility | 0.0 |
| put call | 4.0 |
| implied vol | 0.0 |
| beta | 4.4 |
| debt equity | 5.0 |
- ▸High IV: 531%
Catalyst
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.2 |
- ▸Earnings concerns: 1B/3M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.0<4.5
- ASYMMETRY:0.2<1.5@spot
Warning (0)
none
Reward-to-Risk
0.25
Upside
+2.6%
Downside
10.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.2B) below institutional reach
SuitabilityAggressive — Beta 1.68>1.3, MCap $1.2B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.0<4.5.
The strongest dimensions are Growth at 10.0, Technical at 8.3, and Value at 7.8; the weakest are Momentum at 2.0, Quality at 2.0, and Catalyst at 2.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Growth Leadership
Trip ifRevenue growth falls below 5% year-over-year for at least 2 consecutive quarters.
- P2Earnings Miss Pattern
Trip ifEPS surprise falls below negative 50% in at least 2 of the next 4 quarters.
- P3Fcf Negative Quality Gap
Trip ifFree cash flow remains negative for more than 3 consecutive quarters with no improvement trend.
- P4Breakout Technical Setup
Trip ifPrice drops below $27, more than 7% below the current $29.02, reversing the golden cross setup.