Can STLD Extend its Bull Run Through Earnings?

Steel Dynamics, Inc. (NASDAQ:STLD) is one of the largest domestic steel producers and metals recyclers in the United States. The American company is based in Fort Wayne, Indiana and is the third-largest producer of carbon steel products in the United States.

On April 7, Steel Dynamics announced that it will release its first-quarter  results after the market closes on Monday, April 19. STLD has outperformed consensus earnings expectations on all four of its most recent earnings reports. This morning, STLD is up 2.1% at $51.47.

For the first quarter of 2020, Steel Dynamics beat analysts’ estimates by a margin of $0.09 and reported an earnings per share (EPS) of $0.88. For the second quarter of 2020, STLD decreased its EPS to $0.47 but still beat expectations by a margin of $0.12. For the third quarter of 2020, Steel Dynamics posted an increase in earnings, rising to $0.51 per share and beating estimates by a margin of $0.04. In the most recent quarterly announcement, Steel Dynamics reported an EPS of $0.97 and beat expectations by a margin of $0.15.

STLD has more than doubled year-over-year and increased 150% after bottoming out at a 52-week low of $20.58. Shares of Steel Dynamics stock have also increased nearly 38% year-to-date. STLD is currently down just 2% from its 52-week high of $52.59. Additionally, Steel Dynamics' forward dividend stands at $1.04, which translates to a dividend yield of 2.06%.

Diving into a the fundamentals behind Steel Dynamics stock, you will find that the company hasn’t performed well in recent years. STLD's revenues declined more than 8%, or $860 million, in 2020 and have decreased 19%, or $2.22 billion, since 2018. Things are even worse for Steel Dynamics on the bottom-line, with the company’s net income decreasing by 18% in 2020 and by a whopping 56% since 2018.

Steel Dynamics stock offers an incredibly low forward price-earnings ratio 8.68, which is a huge difference from its current price-earnings ratio of 19.79. Overall, Steel Dynamics stock may not be offering the best potential for a long-term investment, but we could see its recent bull run extended in the short term based on its earnings performance on Monday.