Merger can’t mask the miss. Ryerson Holding reported Q4 EPS of -$0.46, missing the $0.10 consensus estimate by 560%. The metal fabricator posted revenue of $4.47B for the full year, up 3.1% year-over-year, but the earnings shortfall sent shares down 5.5% to $23.29 in regular trading. The company’s stock has now fallen 19.8% over the past month as investors brace for continued pressure in industrial metals.
The Olympic Steel combination. Management spent most of the earnings call discussing the announced merger with Olympic Steel, with CEO Eddie Lehner positioning the deal as a strategic response to margin compression. CFO Jim Claussen acknowledged the quarter hit “adjusted EBITDA excluding LIFO at the low end of our guidance range, with revenue and shipments in line with expectations.” The company’s negative profit margin of -0.51% and trailing EPS of -$0.71 underscore the urgency behind the consolidation move.
Volume weakness ahead. Claussen guided investors to expect volumes softening “by 5 to 7%” in Q4 2025, a warning that industrial demand remains under pressure. The company’s operating margin sits at just 0.90%, well below the levels needed to justify its forward P/E of 18.4x. Full-year revenue of $4.47B represents modest growth from 2024’s $4.34B, but profitability has deteriorated sharply—net income for fiscal 2025 turned negative at -$22.8M compared to -$4.3M in the prior year period.
Working capital the bright spot. Management pointed to expected “decent working capital release and cash flow” in the fourth quarter as one of the few positive catalysts. The company closed Q3 with total assets of $2.49B and stockholders’ equity of $787M, down from $832M a year earlier. Analysts from KeyBanc Capital Markets and Robotti & Company participated in the Q&A, probing on merger synergies and timing given the weak standalone performance.
Valuation without momentum. Trading at $23.22, Ryerson sits just below its 200-day average of $23.31 but well off its 50-day average of $27.08. The stock’s $748M market cap reflects skepticism that the Olympic Steel merger can offset structural headwinds in metal distribution. Analyst consensus holds at a $29 price target with a “hold” rating, suggesting limited upside until management demonstrates the combined entity can generate positive earnings. Forward EPS estimates of $1.26 for fiscal 2026 imply a dramatic turnaround that recent trends don’t support.
This article was generated using AlphaStreet’s proprietary financial analysis technology and reviewed by our editorial team.