Commercial Metals Company
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Commercial Metals is mid-cycle in a sharp earnings recovery, with FY2026 (ended 31 Aug) net income of $655.8M versus $84.7M in FY2025 and consolidated core EBITDA rising to $1.4B from $837.3M, driven by accelerating quarterly revenue growth that hit +25.7% YoY in Q4 FY2026.
The stock trades at a P/E of 11.0x and EV/EBITDA of 7.8x, roughly 29% and 34% below peer medians respectively, offering cyclical value with earnings momentum confirmed by a Q4 EPS beat of $2.09 versus an estimated $1.95. The TAG program and recently acquired Precast operations add structural margin catalysts, though total debt more than doubled to $3.38B from $1.35B and the price sits below both the 50-day ($66.88) and 200-day ($69.57) moving averages as of 16 Oct, warranting measured conviction.
What could go wrong
- Leverage surge from acquisition. Total debt jumped from $1.35B in FY2025 to $3.38B in FY2026, likely tied to the $2.5B precast acquisition, materially raising balance sheet risk if steel cycles turn.
- Cyclical margin normalization. Q4 FY2026 outperformance was driven by favorable steel spreads and lower scrap costs per third-party analysis; net margin of 7.0% remains below FY2023's 9.8% and FY2022's 13.7%, and could compress if spreads revert.
- Technical weakness. Last close of $64.98 as of 16 Oct sits below both the 50-day MA of $66.88 and 200-day MA of $69.57, indicating persistent downward price pressure despite improving fundamentals.
- Insider net selling. Over the trailing 24 months, insiders net sold 9,365 shares for a net value outflow of approximately $1.13M, though recent transactions were primarily code-F tax-related dispositions.
What would change my mind
Where this comes from: fundamentals, year to 31 Aug · news, 15 Oct · Q4 FY26 results · earnings vs estimates, 15 Oct. Orin's read on CMC; not advice.
How has the share price moved?
Up 5.3% over twelve months, from $60.41 on 27 Oct 2025 to $63.61 at the Tue 27 Oct 2026 close. Its highest close in that time was $83.21 on 11 Feb 2026; the last close is 23.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 5.0M, on 26 Jun 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All CMC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $955.0M | 0.0% |
| State Street | $434.1M | 0.0% |
| FMR | $380.3M | 0.0% |
| Vanguard Portfolio Management | $366.9M | 0.0% |
| Vanguard Capital Management | $313.1M | 0.0% |
| Geode Capital Management | $192.8M | 0.0% |
| Invesco | $155.3M | 0.0% |
| Franklin Resources | $125.2M | 0.0% |
| Goldman Sachs Group | $109.3M | 0.0% |
| Charles Schwab Investment Management | $99.9M | 0.0% |
70 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 168 Form 4 filings; open-market trades net −$1.1M. Of the 50 on hand, 1 was an open-market purchase and 0 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about CMC
Orin answers questions about CMC from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 10.8× its last 12 months of profit (Tue 27 Oct close); the typical Basic Materials company on the NYSE is at 22.4×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 10.8× | — | 22.4× |
| P/S | 0.74×near usual | 0.78× | — |
| EV/EBITDA | 7.7×above usual | 6.8× | — |
| P/B | 1.5×near usual | 1.6× | — |
- P/E: no usual level — it ran from 4.0× to 76.9× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $78.86 (from $70 to $89) — 24% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$78.86
$70 – $89 · +24% against the last close
- 8 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 10.8× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 17.2×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| CMCCommercial Metals Company | $7B | 10.8× | 7.7× | 18.6% | 7.0% | 15% |
| CLFCleveland-Cliffs Inc. | $8B | lost money | 15.7× | 1.9% | −2.4% | −8% |
| FRDFriedman Industries, Incorporated | $256M | 6.2× | 4.2× | 9.4% | 4.6% | 25% |
| NUENucor Corporation | $61B | 17.2× | 9.7× | 17.3% | 9.3% | 16% |
| STLDSteel Dynamics, Inc. | $35B | 18.1× | 11.0× | 15.8% | 8.8% | 21% |
- CLF: lost money over the last 12 months, so no P/E.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 10.8× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now10.8×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Basic Materials companies on the NYSE were priced at a typical 22.4× their yearly profit (Tue 27 Oct close).
- Now22.4×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $31 a share — 51% below the $63.53 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $31 | 51% below $63.53 |
| Levered | $32 | 50% below $63.53 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.